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Fred Goldring: A Strategic Insurance Policy for Self-Absorbed Rich People

by Fred Goldring on February 5, 2012

Huffington Post…

Ok let’s look at the current state of affairs in the U.S. from the perspective of that portion of the 1% who only sees things from their own completely self-interested viewpoint. You’re someone who has worked really hard — the old fashioned way — to earn what you have achieved (or you are part of the lucky inheritance club and your father or grandfather worked really hard to get what you now enjoy). You’ve hit it big and now have lots of money and a great lifestyle. You have a very difficult time rationalizing or even comprehending why your dollars should go towards higher taxes to support a bunch of poor, know-nothing, lazy people, particularly those immigrants and undocumented aliens who come here and live off the fat of the land for free (when they’re not otherwise taking away those menial manual labor jobs from real Americans). And you are dead set against that big wasteful government machine that only encourages people not to work, live off welfare and food stamps and now get expensive or subsidized medical care via “Obamacare” which you are paying for. So with all of this money out of your pocket for taxes, what does it do for you personally? You are all set in your life and what happens to these people is not your concern because, hey, it’s America, and everybody has a chance to attain the American Dream just like you did. If they don’t, it’s their problem, not yours; they are obviously just lazy or unlucky, some make it and some don’t, that’s unfortunately the way the world works. So keep taxes as low as possible (particularly for you as one of the “job creators”), pay for only the minimum basic government services which are necessary, and let these people fend for themselves or be cared for by the “private sector” which you are certain always steps in to fill the void. Here’s the problem with this ideology: it’s actually in your self-interest to take care of these people. If history has taught us anything, it was that this same attitude eventually caused the fall of many civilizations throughout the millennia, (many of which were around a lot longer than the 236 years that the United States has existed). What happened in those situations was that too much money, power and control were in the hands of too few at the top who started to distance themselves from the masses and pull the ladder up behind them, leaving them in the dust. And they got mad as hell and couldn’t take it anymore. When you actually look at the facts about taxes today, you see that we are paying lower taxes than ever before and all that has been suggested is closing tax loopholes and raising the top tax bracket from 36% to 39% (that was the top rate when Clinton was in office and we had a surplus). But since that may still seem like a lot to ask, let’s look at this in a completely different way. Instead of looking at all of this merely as the government taking your money and giving it to unentitled poor people, how about looking at this slight increase in your taxes (which frankly won’t make one iota of a dent in your lifestyle) as a strategic insurance policy or a hedge? You regularly take out life insurance policies, health insurance policies, liability policies, disability policies, car insurance and homeowners, renters insurance policies — even policies to pay inheritance taxes. How about an insurance policy against people rising up and just taking what you own and possess because you’ve pushed them too far and they have no where else to go? To understand what I mean by this, let’s start by looking at something that is obvious and that many of us take for granted: that invisible line separating the rich suburbs from the poor neighborhoods and the inner city. In case you haven’t noticed, there is no wall or physical barrier that keeps poorer people from invading the rich neighborhoods. Yeah, I know we have the police force, private security patrols, alarms, etc. and we know that “those people just wouldn’t do that”. But in reality all we really have in place is an implied social contract. The contract is that those poor needy people will more or less leave you alone as long as you take care of their basic needs (food, clothing, shelter, protection, education and the like). However, with the direction we are going in lately, we seem to be getting dangerously close to imposing a condition of desperation with these people because we are threatening to take away (and in some cases already have) their opportunity to get these basic human necessities. And we will discover that there will come a point when these people will have been pushed too far and will feel they have nothing left to lose. They will then come to realize very quickly (much like the emperor’s new clothes) that this “line” between their neighborhood and yours is, in reality, invisible and non-existent. In a nation where we’ve made the ability to get a firearm much easier than getting a driver’s license and now have hundreds of millions of guns out there, is it really worth the risk of pushing poor people (and middle class people who are on the verge of falling into poverty) to the boiling point? People who feel oppressed also have new tools to connect and rise up behind a cause than ever before. Can anyone say Arab Spring? Occupy Wall Street? Putting aside the rational Judeo/Christian moral arguments about helping those less fortunate and in need, creating a societal structure to help people pull themselves up and giving them the opportunity to advance in society, it is in the self-interest of you as a “one percenter” to help these people. If you don’t, you run the very real risk of the “invisible barrier” evaporating and having real class warfare in this country. Despite the political assertions to the contrary, it is not “”class warfare” to tell the 1% that some of their money should go towards helping those less fortunate – it’s actually good, smart, strategic business. It’s an insurance policy to protect your assets and good fortune. There’s that old saying about how “the pigs get rich and the hogs get slaughtered”. The completely self-interested members of the 1% need to decide soon whether they are going to be pigs or hogs. You might say I’m just being paranoid. I say look back at history for this lesson, don’t take my word for it. And for a bit of underscored irony, be sure to catch the new Batman movie The Dark Knight Rises that millions will be watching this summer. Who is that new villain who is terrorizing the people of Gotham City? His name is Bane. Sounds eerily like the name of Romney’s former company.

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Fred Goldring: A Strategic Insurance Policy for Self-Absorbed Rich People

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AOL To Buy Huffington Post For 315M

by Mark Miller on July 2, 2011

Oversight Committee Overlooking Ethics Rules?

June 17, 2011

WASHINGTON — Rep. Darrell Issa’s Oversight Committee may have violated House ethics rules by streaming a hearing Friday that included commercial advertising. The committee, holding a field hearing in North Charleston, S.C., on the National Labor Relations Board, apparently did not transport the gear it needed to stream the hearing with government resources. So it resorted to the commercial UStream site to feed the hearing, and hosted the feed on the official Oversight Committee homepage. But that comes with ads, which government watchdogs say is prohibited. And Chairman Issa (R-Calif.) knows it. “Members are prohibited from doing anything that has an implied commercial endorsement,” said Melanie Sloan, the head of Citizens for Responsibility and Ethics in Washington. When the Huffington Post clicked to watch the hearing, an ad for Verizon popped before the stream of the official proceedings would begin. As the hearing went on, ads served by Google for various services popped up, including one offering help with government bids and another aid getting Pell grants. Refreshing the page after a brief recess brought up an ad for United Healthcare. Also, the logo for UStream was carried across the top of the page for the entire hearing. See the Verizon ad below: “It’s an implied endorsement,” Sloan said. And she added that Issa should know better because she once pointed out to him that it was an issue when a web designer touted work done on Issa’s website. “He took care of it,” Sloan said. The committee did not immediately respond to a request for comment, but apparently decided to make use of the streaming service used by the local county government, perhaps saving money and effort on the part of the federal government. Sloan said expediency was not an adequate defense. “Maybe they just didn’t want to deal with the rules, but that’s not an excuse,” she said. Perhaps complicating the issue, at least one of the ads featured a company — Verizon — that has a history with the National Labor Relations Board, which ruled against the phone service provider in a noted 2007 case. Verizon’s president at the time, Denny Strigl, has since retired and recently become a vocal critic of the NLRB and the very topic that Issa was addressing, a recent ruling against Boeing. In that case, the NLRB alleges that Boeing started a production line in South Carolina as retaliation against unionized workers in Washington State who have gone on strike in the past.

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Illinois Restaurateur Owes Workers $1 Million In Back Pay, Damages

May 31, 2011

WASHINGTON — Workers got a pretty raw deal at Dolores Onate’s two Mexican restaurants in Decatur, Ill. Not only were the waiters and kitchen workers stiffed on overtime and minimum-wage requirements, they were actually forced to pay their wages back directly to Onate, according to a federal court case decided this month. Due to violations of fair labor laws, Dolores Onate and her restaurants’ manager, brother Ricardo Onate, have been ordered to pay a whopping $1.15 million in back pay and damages to 64 workers — an unusually high penalty for a small-business restaurateur. “It really took a lot of gall for an employer to request that money be returned,” labor department spokesman Scott Allen told the Huffington Post. “It’s absolutely unacceptable. That’s why the penalty was as severe as it was.” From 2006 to 2009, the wait staff at El Matador and El Caporal restaurants had been allowed to keep their cash tips, but they were required to endorse their paychecks back to the restaurant, according to the decision. Kitchen staff, busboys, and dishwashers at the restaurants were paid less than the minimum wage, did not receive the overtime pay due them, and were also ordered to return a portion of their paychecks to the ownership. Employees were also told not to punch in until a certain time, even though they may have started work much earlier. Many of the workers were Hispanic immigrants. A lawyer for the Onates did not return a call seeking comment. Ted Smukler of Interfaith Worker Justice , a Chicago-based non-profit that advocates for low-wage workers, said the Decatur case is indicative of widespread wage violations in American restaurants. “It’s incredibly prevalent throughout the entire restaurant industry,” Smukler said. “A lot of times it’s not just that workers don’t understand their rights, but that they don’t feel it’s safe to assert them, depending on their immigration status or their need for the job in this economy.” Smukler added that many violations go unreported, and that many victims simply move on to other restaurant jobs. His group recently surveyed workers from 200 restaurants in Chicago and found that almost none of them were in full compliance with wage laws. According to a recent report from Restaurant Opportunities Centers United, nearly half of restaurant workers say they work overtime for which they’re not paid, and roughly 90 percent said they don’t receive paid sick days and don’t receive health insurance through their employer. Many workers also don’t receive the minimum wage. Employers are supposed to pay tipped employees a base wage — either the $2.13 federal rate or the state rate, whichever is higher — that, combined with the employees’ tips, should meet the normal minimum wage. If not, the employer is supposed to make up the difference. The labor department investigation found that many of the workers at El Matador and El Caporal received wages that fell well short of the state’s minimum. “The defendants in this case willfully and repeatedly violated federal labor standards,” labor secretary Hilda Solis said in a statement . “These vulnerable workers will receive their rightful pay.” Allen said that after its investigation the labor department had tried to work with the Onates to get the workers paid properly. Only when the Onates declined to cooperate did the labor department file suit against them. “It’s sad, actually,” Allen said. “No one should have to go through all this to receive their just pay.”

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Dennis Santiago: Crunching the Bank Numbers for 1st Quarter of 2011

May 27, 2011

We received the 1st Quarter of 2011 research dataset from the FDIC at Institutional Risk Analytics yesterday. The computers churned the data overnight so our customers could begin to look at the surveillance analytics for their banks of interest this morning. I’ve been staring at the summary statistics for the industry today and file the following observations for those of you entertained by how this is all playing out. Stress: Forks in the Road There’s a fork in the road for the stressed out TBTF’s. At the end of 2010, we were tracking 545 institutions representing $4,909B in assets that has an IRA Bank Stress Index grade of B. This was the interesting population of “large complex institutions” (LCI’s) dealing with the indigestion of rotting mortgages in their bellies. Come the end of 1Q2011, forty-four of these banks exit the B grade column and look to have split with one group representing maybe $3.1T in assets migrating back up to A stress grade condition and another faction worth approximately $1.6T dropping further down to join other banks in the C column. We are just beginning to look at what commonalities are shared by these two emerging clusters of larger institutions but for me it begins to add a little more clarity to the musing I referred to in the article I filed a couple of days ago, “Bank Fail” Pondering the Unthinkable . There’s another major note in this quarter’s data on the small bank side. A little over 500 of them joined the A+ grade stress silo this quarter, quite a number of them going from F to A+ as they begin to show positive operating income again. The most common strategy we see is an adoption of a mixed business operating profile cutting back on lending and favoring the use of money to put into investment assets made so attractive by quantitative easing. Clearly, the economist’s view that encouraging all banks to migrate towards post Glass-Steagall portfolio management profiles is tickling down. That’s good news for Wall Street. Read on for what it means to Main Street. Deposits: Big Winners The news in bank deposits country for Q1 is that the big banks continue to be the big winners. The over $65B size institutions hold just over $6T in deposits versus $3.6T by all the smaller banks combined. More important, the big banks have grown deposits by $1T since June 2008 while the smaller bank group has stayed flat only moving up $100B in deposits in the same time. More interestingly, this winning formula by the big banks has been happening in the low or no interest paying checking and savings accounts category. Interest paying time deposits are way down at the big banks, a much deeper decline than experienced at the smaller institutions. This means the cost of doing business for these big banks is materially advantaged versus the smaller group. I’m not saying I like it. What I am saying is despite people in America whining about “Too Big To Fail”, the deposits story says Americans still bank there. The big banks have known this all along of course. Now you do too. Lending: Still a Dearth Back in January I filed a blog on the Huffington Post titled “A Deepening Dearth of Lending” . That trajectory towards that dearth remains in effect. Total bank industry lending is now down about $800B since June 2008. Bank willingness to extend commitments to borrowers is down around $2T in the same timeframe. That’s a lot of private capital energy taken out of the economy. The bank’s reluctance to lend manifests as a steady flight to quality. We see them hammering down annualized gross default rates – a measure of operating stress – from a peak of 302 basis points (bp) this time last year to around 211 bp this quarter. That’s still elevated compared to the 127 bp it was in June 2008 so the pressure to stay stingy doesn’t look like it’s gone away just yet. The flight to quality also shows loss given default rates have come down now to 86.8% which is actually below the 90% it was in 2008. The message of these numbers is clearly that you’d better have stellar credit to ask for credit. But you already knew that. Now you have a little better picture of how much it matters to your banker. Distressed Real Estate: The Workout Continues The news is that real estate lending for the banking industry is getting safer. The annualized gross default rate for residential real estate is down from a peak of 212 bp a year ago to 159 bp roughly following the same trend as lending in general. Nationwide R.E. loans have dropped by $634B to $4,161B down from $4,795B in June 2008. Magnitude wise things could have been worse at this point and clearly this apparent stabilization has much to do with the gargantuan efforts of the United States to deliberately spend treasure to buy time. That time continues to be spent working out the excess inventory of our last mortgage boom. Looking at degraded real estate in particular that data shows that work to stem what was a tidal wave of 30-89 day delinquent loans seems to have gotten us back to the same levels of $76-78B today as it was in 2008 when the swan eggs hatched. This doesn’t mean the nest isn’t toxic. Over 90 day delinquent real estate presently stands at $105.5B. It was a mere $19B the day the music stopped. Similar large workout inventory remains in Non-Accrual loans that stand at $186B today and Other Real Estate Owned sits at $52B as of 1Q2011. To see the numbers behind this report go to the IRA Industry Fact Sheet .

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Foreclosures Fall To 40 Month Low — Due To Paperwork Delays, Not Recovery

May 12, 2011

Foreclosure activity has fallen to a 40-month low, but not because of any recovery in the housing market, a new report finds. Rather, the slowdown comes from massive delays in processing foreclosure paperwork. In April, overall foreclosure filings — including default notices, scheduled auctions and bank repossessions — declined for the seventh month straight to 219,258, a 9 percent decrease from March and a 34 percent decrease from April last year. Banks seized 69,532 homes last month, a 5 percent drop from March, according to data provider RealtyTrac. “This slowdown continues to be largely the result of massive delays in processing foreclosures rather than the result of a housing recovery that is lifting people out of foreclosure,” said James J. Saccacio, chief executive officer of RealtyTrac, in a press release. Nationwide, foreclosures completed in the first quarter of the year took an average of 400 days from initial default notice to conclusion, up from the 340 days the process took last year and more than twice the average time — 151 days — it took to complete a foreclosure in the first quarter of 2007. In some states, that number soared higher. In New Jersey and New York, the average timeframe in the first quarter of this year was 900 days. In Florida, it was 619. With home prices still falling, a slowdown in foreclosures driven by paperwork delays is bad news for the overall housing market recovery. Home prices hit their lowest point in two years in April, falling 0.7 percent below March 2009 levels, according to a recent report by Clear Capital. Housing experts say the data from RealtyTrac’s report does not indicate a reversal of this trend will be quickly forthcoming. “As the servicers sort out their processing issues and staff up a little that means these homes will end up on the market as a distress sale and that will cause home prices to fall further,” said Celia Chen, a housing market analyst for Moody’s Analytics. “It delays the problem. It extends the recovery in the housing market,” Last fall, many of the nation’s largest lenders voluntarily halted home repossessions when flawed foreclosure practices came to light. On Wednesday, the Huffington Post reported that HSBC North America Holdings, the 12th-largest mortgage servicer in the U.S., will continue its moratorium on home seizures in some jurisdictions. According to the bank’s filings, the bank will not fully resume foreclosing on defaulted borrowers for a number of months. The Obama administration is now pushing for the creation of a federal account to help distressed borrowers and settle ongoing probes into faulty mortgage practices, the Huffington Post reported on Wednesday. There is still a large stock of homes in distress — at least 3.7 million homes are in a late stage of the foreclosure process, according to the report — and housing experts stress that processing these properties as quickly as possible is critical to the recovery of the housing market. “This is what frees up the economy to make forward progress and allows home prices to rise,” said Michael Englund, chief economist at Action Economics. “It will probably take about another year to work our way through the foreclosure mess.”

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Florida GOP To Rick Scott: We Won’t Vote For Anti-Union Bill

April 28, 2011

The story has been updated. WASHINGTON — A controversial bill targeting public unions in Florida appears headed for failure, despite a last-minute lobbying effort by Republican Gov. Rick Scott (R). The legislation, SB 830 , would prohibit state and local governments from automatically deducting union dues from employees’ paychecks. Union members would also have to give written consent before their dues are used for political purposes. According to a report in the Miami Herald , Scott made rare personal visits to the offices of four Republican state senators and pleaded with them to support the measure on Wednesday. All of them, however, were unpersuaded. “I’m a conservative Republican,” said Charlie Dean, one of the senators who met with Scott. “I support the governor and I support the president and speaker. But I also reserve the right somehow to make up my own mind.” Dean aide Kevin Sweeny further told The Huffington Post that the senator objected to the fact that the bill only singles out public employee unions for making automatic paycheck deductions. Indeed, in Florida, there are 364 groups or agencies that can take money out of employees’ wages for charitable donations, life insurance, taxes and other deductions. Thrasher’s bill, however, focuses only on union dues. “[Sen. Dean's] main objections are that he doesn’t believe it’s his money to say; it should be left alone,” said Sweeny. “What he would really like to see is if we’re going to take away the option for the state to take the money out of the checks, we should do it across the board.” After meeting with Scott, one of the other GOP senators, Miguel Diaz de la Portilla, said of the bill , “It creates division and turmoil, and doesn’t create jobs.” In an interview with The Huffington Post, state Sen. Rene Garcia (R) confirmed that he met with Scott on Wednesday and reiterated that he would be opposing the bill. He said he had heard from many of his constituents who were union members and wondered why the legislature was targeting them rather than going after all automatic deductions. “If we weren’t a right to work state, I might have been more inclined to vote for it,” he said. “But this is a right to work state, and people aren’t forced to join a union. People can opt in and opt out of a union whenever they want. That’s my main reason for voting against this bill.” Lane Wright, Scott’s press secretary, explained in an email to The Huffington Post that Scott supports SB 830 “because he believes union workers should have a right to know how their union dues are being spent.” Labor unions have been actively organizing against SB 830, as well as an executive order by Scott that would mandate random drug tests of state employees and a proposal to privatize Medicaid. A Florida labor official told The Huffington Post that GOP legislators were hesitant to tie themselves to Scott’s controversial bill, in light of the governor’s rapidly declining poll numbers . “There’s a group of concerned Republican legislators who have heard from their constituents that they don’t like this,” the source added. “This is not creating jobs. The governor is wildly un-liked. His poll numbers are absolutely atrocious.” The bill’s sponsor, state Sen. John Thrasher (R) did not return a request for comment. SB 830 was on the legislative calendar on Wednesday but delayed for supporters to shore up votes. It’s also on the calendar for Thursday, although it’s not expected to move anywhere without significant changes. “This legislation is, at this point in time, for all intents and purposes, completely stalled,” said the labor official. “We won’t call it dead, simply because there is a Republican supermajority. For that matter alone, I won’t call anything dead until the gavel goes down on the final day of the legislature.”

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Eric K. Clemons: The Need to Focus on the Correct Issues in Google, Power, and Antitrust

April 19, 2011

A proper discussion of the benefits and limitations of the recent Consent Decree between the Department of Justice and Google, concerning Google’s acquisition of ITA, needs to begin with a discussion of appropriate measures for consumer welfare, the ultimate objective of antitrust regulation, and with a discussion of the relationship between protecting the current competitive process and future consumer welfare. Misconceptions About Google and Antitrust The discussion of Google and antitrust has shifted in recent weeks from relevant market (is Google 65% of paid search, 32% of online advertising, or 3% of all advertising?) and anticompetitive behavior (is Google engaging in ” preemptive line extensions ,” unfairly squeezing out competition by pricing its non-search offerings below cost, or unfairly listing its own offerings above those of competitors?) to consumer happiness and consumer convenience. Mainstream publications have adopted the consumer happiness argument. Indeed, the consumer happiness argument has not only been adopted, but twisted out of all recognition. Bill Gurley writes about the unstoppable Android Freight Train , and describes how Adwords provides Google with an unassailable set of “Castles and Moats,” generating huge cash surpluses, which can then be used to destroy all competition by offering products free: One might yearn to suggest that there is a market unjust here that should be investigated by some government entity, but let us not forget that the consumer is not harmed here – in fact far from it. The consumer is getting great software at the cheapest price possible. Free. The consumer might be harmed if this activity were prevented. And as we just suggested above, the market is finally driving towards software pricing that represents “perfect competition.” How can the absence of competition be perfect competition? And yet, why should we care if the public does not understand competition or competition law? Antitrust really is about consumer welfare, right? It’s not about corporate welfare, right? How could consumers be happier than they are now, when they are getting great stuff free? And if consumers are happy now, shouldn’t regulators be happy as well? If consumers are happy, is there even a need for regulation? Mainstream publications have also argued that consumers are well informed and better able to counter monopolistic behavior than any regulatory agency. Harry McCracken at Time Magazine recently claimed : “Consumers, in other words, tend to be pretty good at figuring out what’s good for consumers. I trust their take on Google and its competitors more than that of any government agency.” There are three problems with this analysis: Consumers are not always the best judges of their own welfare. Happiness and convenience are not always the best measures of welfare. Current happiness and convenience are not always the best measures of long-term future welfare. It should be obvious that consumers are not always the best judges of their own welfare, and it should be obvious that consumers have extreme difficulty judging whether actions will improve their welfare if the results follow from complex interactions, occur after a significant delay, or both. The argument that government should help consumers through regulation sounds paternalistic, but if consumers were always the best judges of their long-term welfare, we would not have problems with smoking or obesity. We know that consumers often make bad decisions when an experience is immediately pleasurable and when harm is deferred or the relationship between cause and effect are complex and not immediately visible. Free software is pleasurable. This free software is funded through excessive charges imposed on companies that need to pay to be found through search; consumers cannot readily observe the harm that comes from these excessive charges because the complex mechanisms by which these charges are passed along to consumers are not directly observable. Again, it should be clear that consumer convenience not always best metric of consumer welfare. Fast food is convenient, but consumers who indulge excessively in fast food incur substantial medical problems and regulators are now arguing against easy access to fast food in public schools. Regulators can and do intervene when consumers over-value convenience and under-estimate the costs to themselves resulting from convenience. Michael Jacobson’s indictment of McDonald’s in the Huffington Post may seem a bit harsh, noting that “McDonald’s has coarsened our palates, expanded our waistlines, clogged our arteries, and brainwashed our children with toy-based marketing” and connecting it to the fact that we now spend over $270 million annually on heart disease; still our national love-affair with fast food suggests that we are not always the best judges of our own welfare, and that we do not always do the best job balancing immediate convenience with long term harm. Finally, it may not be obvious, but short-term consumer gains can still represent long-term harm to the competitive process and long-term harm to consumers. Indeed, antitrust laws are concerned with harm to the competitive process, not merely harm to consumers. Courts have long recognized this discrepancy and rejected any arguments that current consumer happiness is a valid measure of future antitrust concerns, or indeed that current consumer happiness is even a valid measure of present antitrust dangers. 1 Free or subsidized offerings can appear to offer additional choice, but they often kill competition, harming the competitive process. This inevitably reduces consumer choice, which often reduces the new player’s incentive to innovative and allows the new player to charge substantially higher prices. After Microsoft’s offerings destroyed Word Perfect, consumers were left only with Word, with some features (like footnoting and outlining) that remained bug-ridden and inferior for years; the absence of competition also allowed Microsoft to convert Office into a major cash cow. This is not merely an abstract discussion of future power, but a discussion of abuses that are already possible. Likewise, it is not an abstract discussion of consumers being unable to detect harm to the competitive process, but an example of undetected harm already occurring. Google’s revision to its search engine , code-named Panda, substantially reduced the visibility of low quality sites, which is definitely a good thing. But the Panda release also seems to have slammed Ciao.co.uk , a Microsoft-owned company, and a potential competitor as a pricing comparison site, which had been leading an EU competition case against Google. Reductions in visibility of between 81% and 94% have been report for Ciao.co.uk since the update. Not surprisingly, Google claims it is “almost absurd” that the reduction in visibility could have been rigged, although a convincing alternative explanation seems to be lacking. As importantly, as damaging as the changes may be to competitors and ultimately to consumers, consumers do at present appear pleased with the changes. Consumers are happy. And they are being harmed. While current consumer happiness is important, it is not and indeed cannot be the sole measure of antitrust abuse. Notes: 1 – See e.g., Fisherman v. Estate of Wirtz , 807 F.2d 520, 536 (7th Cir. 1986) (“The antitrust laws are concerned with the competitive process, and their application does not depend in each particular case upon the ultimate demonstrable consumer effect. A healthy and unimpaired competitive process is presumed to be in the consumer interest”); Key Enterprises of Del., Inc. v. Venice Hosp. , 919 F.2d 1550, 1560 (11th Cir. 1990) (“A court must consider the effect on competition and not simply the effect on the ultimate consumer.”) This is the first installment in a three-part series on the Department of Justice, Google, and the Consent Decree. Check back later this week for more.

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‘A Nation Of Winklevosses’: The ‘Bunk’ Lawsuit Against HuffPost

April 13, 2011

Today, an unpaid contributor to the Huffington Post filed a $105 million suit against the website; its new owner, AOL; and co-founders Arianna Huffington and Kenneth Lerer. The class action suit, filed by writer and union organizer Jonathan Tasini on behalf of all unpaid HuffPo contributors, proves that we’re becoming a nation of Winklevosses who file legal motion after legal motion every time a pot of money is spotted.

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Danny Wong: How Yahoo Can Save Itself

March 24, 2011

After being seen as a repeated failure of a company over the past couple years, Yahoo may just yet redeem itself with its latest search engine update, Search Direct . While this reminds most Google users of one of the latest and biggest Google updates, Google Instant, with its real-time results as you type, Search Direct is less about helping you find the most relevant links for your search query and much more about giving you the appropriate answer, right then and there, to what you are searching for, because the fact is, we all search to ultimately find an answer, information about the thing we’re searching for. This is actually quite an exciting update to Yahoo’s search index, which I first heard about after Anthony Ha reported it on VentureBeat. This advancement in the usability of search engines is incredible. It was first thought that the Google Instant update was exciting because it eliminated the use of having to hit the search button to perform your search query. But now, you don’t even need to click the first link in the results page to get the answers you want to the most common of queries, easily finding out things like the local weather forecast, stock performance, even where to find a local theatre playing the films you want. Yahoo has been seen as dying for several reasons: 1. It’s becoming less innovative in the search game. Yahoo hasn’t done anything exciting with its search algorithm in a while, and while Bing is gaining popularity amongst shoppers and media consumers, Google reigns king because it continues to deliver the best search results, despite some of the bad press it’s received as of late in terms of spammers compromising their search quality. 2. It’s becoming less prominent a company. With less big acquisitions, Yahoo doesn’t have prominence like Google who’s snatching every hot business up both for branding and for profit purposes. No one thinks about Yahoo much anymore because Yahoo’s not doing much of anything that’s interesting, or applicable to our everyday lives. I’ve even stopped using my Yahoo mail for the most part, and use two Gmail accounts, one for personal use and one for professional use. 3. As a media company, they’re not doing anything special. AOL is getting most of the spotlight these days as the big media company to end all media companies, especially with its recent merger with the Huffington Post to house all of its media properties under the Huffington Post. Yahoo just continues to aggregate content from the newswire and isn’t doing enough news publishing itself. What Yahoo can do now to save itself: 1. Actually make Search Direct awesome. While the concept of Search Direct is amazing, and they have rolled out their public beta for the system, I’m sure there’s a lot more to do in updating their algorithms and ensuring that quality answers are always provided for search queries that could easily be answered and immediately displayed without searchers having to click a search results link to find the answer they are looking for. 2. Get back on the media’s good side. Yahoo should be doing more amazing things as a company, and should also be creating more value for users. As such a large company, the media will always bite at anything special going on with Yahoo, so as long as Yahoo is continually building better products for users, it’ll get better press and more people will begin to trust and use Yahoo again. 3. Become an integral part of users’ lives. While Yahoo failed in making Delicious their Yahoo owned service that everyone used and associated Yahoo with, Yahoo can acquire similar companies, or perhaps build its own products and services that millions of users will use each and every day, solidifying its place in users’ daily lives. Yahoo has a long way to go before it redeems itself again as the golden company it once was, but luckily, it’s far from dying anytime soon, so we’ll just have to wait and see how Yahoo develops. Danny Wong is a Boston-area entrepreneur running Blank Label Group , which powers the startups Blank Label , Thread Tradition and RE:custom . Danny also blogs at TheNextWeb and ReadWriteWeb .

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Carla Emil: One Job for America, One Month Later

March 24, 2011

A little over a month ago my husband Rich Silverstein and I launched our One Job For America initiative on the Huffington Post. 600 comments appeared at the time which indicates to me that regardless of what people thought of our idea it’s one that provoked a good deal of conversation. Since then we’ve had over 10,000 visitors to our One Job For America website. And to date nearly 160 businesses from all over the country have made a pledge to create one new job. I’m writing again one month later because I want to continue to encourage people to get behind this campaign. Rich and I are very pleased with the number of businesses that have signed on to our initiative but we’re obviously hoping for many more and we’re working hard to make this happen. We don’t, however, want to diminish the importance of what’s been achieved so far. The creation of 160 new jobs is in itself meaningful but we also have to remember that a single job affects the lives of many people. Even if we look no further than the family we can see that multiples of that number potentially reap the benefits of one new job. And we’ve been particularly heartened by the fact that so many small and mid sized businesses have responded so favorably to our initiative. For many of them the creation of even one new job isn’t an easy thing to do. Their participation in our initiative speaks to their sense of civic and social responsibility, optimism, and often even of patriotism and we hope that more small businesses (those that can) will join our campaign. We do hope to see larger companies pledge on our website as well. So far, other than a few, this hasn’t been the case. We understand their dilemma. Large businesses are always recruiting and hiring. They face employee attrition and are continually letting people go for many different reasons. So how do they participate in a campaign like ours? How do they identify one new job (or, even better, ten)? I can only suggest to large companies that if they believe in our initiative and want to participate that they find creative ways to make this happen. Only they understand their cultures and how to manage them. The opportunity for most of these businesses to create more jobs exists. And all businesses, large and small, know that there is always someone out there who will make their business better! When I wrote my blog a month ago I appealed to the readers’ sense of social responsibility. I talked about the idea of attempting to solve the jobs problem as a national community and suggested that we should work together to make this a better country and a better world. I’m sure some people scoffed at my idealism. But I just don’t know any other way to make this appeal when others with much stronger credentials have had little success in pushing this issue forward. Paul Krugman wrote in an OP-ED piece in the March 18 New York Times called “The Forgotten Millions” that we’re well on our way to creating a permanent underclass of the jobless and asked why Washington doesn’t seem to care. Well, I care and millions of Americans care and I believe that if no new job bills are being introduced in Congress and no job creation plans have been advanced by the White House then we as individuals have to do something about it. We as citizens have the responsibility to find new ways to encourage hiring in our country, put Americans back to work and move our economy forward. One Job for America is suggesting one viable way to do this. I continue to entreat people to focus less on why this idea can’t work and more on how they can make it work. So, once again, we want to ask you to visit our website. It’s been updated to include more information about companies that have made a pledge and will also now include those that have fulfilled their pledges. We believe that if you join our effort you can make a real difference. And we also believe we’ve only just begun.

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A Social Network For The Post-PC–And Post-Privacy–World

March 24, 2011

Color , a new smartphone application, allows you to be virtually all-seeing, putting eyes in the back of your head, into your coworker’s living room, and into that hotel bar your cousin visited just moments ago in Miami. It offers a social networking experience that combines a unique everything-is-public-to-everyone privacy policy with Twitter’s real-time information stream and the photo-and-video-based voyeurism of Facebook. Color CEO Bill Nguyen, who co-founded Lala, a music service acquired by Apple in 2009 , calls the app a social network for the “post-PC world.” Whereas existing social services link our online identities to usernames and URLs, Color ties them to our phones. Users are only asked to submit their first names and phone numbers when they register for the app. Color profiles then follow users wherever they go with their phones, connecting them to other Color users based on proximity. The app is also a social network for a post-privacy world: anything shared to Color is instantly visible to anyone in any place at any time. “As tech causes cultural changes, we’re going to live so much more of our lives in public,” Nguyen told the Huffington Post. “There’s private stuff and there’s public stuff. Decide which kind of information you want to share and then launch the appropriate app for that.” The power of Color’s all-seeing eye is best experienced first hand. Imagine yourself at a wedding where friends, relatives, and strangers are snapping photos of the newlyweds and posting them on Color. Any pictures or videos uploaded with the app will immediately be shared with all of the surrounding phones–as will any pictures or videos the guests have ever added to the app, whether from a bachelor party binge or a baby’s birthday. Via this access, immediacy, and proximity-based interaction, Color aims to deliver a social network that ties engagement to a shared, physical experience and in so doing, facilitates connections between strangers. Though users can choose to follow specific people’s feeds, there is no “friending” or “following” on Color. Instead, the app’s software uses the GPS and Bluetooth capabilities on phones to automatically surface people who are in close proximity to a user or with whom that user interacts with frequently. Frequent interaction involves viewing, “liking,” or commenting on other users’ posts. The app also taps into phones’ light sensors and microphones to distinguish photos taken by individuals in a shared environment (such as a party where multiple Color users are taking photos) from the snapshots of people who merely happen to be nearby (such as a separate event in close proximity). Color has raised $41 million in funding from investors including Bain Capital Ventures, Sequoia Capital, and Sillicon Valley Bank. “Just as the iPhone changed everything about mobile phones, Color will transform the way people communicate with each other,” Doug Leone, a partner at Sequoia Capital, said in a statement. “Once or twice a decade a company emerges from Silicon Valley that can change everything. Color is one of those companies.” One thing Color seeks to change is what its creators see as a flaw with existing social media services: the increasing difficulty of befriending new people online, which the company said in a statement had become “almost impossible.” “Social networks are doing pretty amazing things, but to me, social networks still [feel] solitary, like advanced email, where you write something, post something, and someone responds. That’s not like real life at all,” Nguyen said. In addition to giving users yet another avenue through which to peer into others’ lives, the app also provides users one more way to ensure nothing is forgotten about their own. “This is like TIVO-ing life. There’s no forgetting,” Nguyen said. “I think it’s the best, most complete way of having a record of your life. It’s your life crowdsourced.” How much users will choose to share–and whether an all-public app appeals to them–has yet to be seen. Would you try Color? Why or why not? Weigh in below. Color, available for free, is launching Wednesday on Android and iPhone. Blackberry and Windows Phone 7 apps will be coming soon. WATCH: Color Demo from Color Labs, Inc. on Vimeo .

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Progressives Bemoan Focus On Deficit, Call For Stronger Job Creation Agenda

March 10, 2011

WASHINGTON — The usual beef against Beltway politicos is that they spend too much time reading the polls. But to a group of progressives gathered on Thursday to talk about jobs, the problem is that the capital’s elites don’t heed the polls nearly enough. Survey after survey of public opinion finds that unemployment and the struggling economy are the most troubling issues for most Americans. But policymakers from both parties are madly pursuing a different priority instead: deficit reduction. And they want to curb federal debt not through tax increases on the rich , which the public supports, but through spending cuts on popular programs. The result, certainly in the short term , would be the opposite of job-creation. “It’s not the public that’s the problem, it’s the elite conversation that’s the problem,” pollster Celinda Lake of Lake Research Partners said Thursday. If today’s politicians are being driven by the polls, Lake said, “it’s not any polls I’ve seen.” On and off the podium at Thursday’s event — a summit on jobs organized by the progressive Campaign for America’s Future — the profound disconnect between public opinion and the public agenda was a constant theme. And it left many of the speakers more than a little dumbfounded. “The idea of national austerity in this environment is truly mind-boggling,” said AFL-CIO President Richard Trumka. “Anybody who thinks you can deflate your way into recovery is delusional,” said American Prospect co-editor Robert Kuttner. “We can’t slash our way to prosperity, we have to invest,” said economic equity advocate Angela Glover Blackwell. Indeed, what’s so exasperatingly self-defeating about the current epidemic of deficit hysteria is that the best deficit reduction program would actually be to create jobs — and bring the tax base back up. “We know the solutions,” said Leo Hindery, who heads the U.S. Economy/Smart Globalization Initiative at the New America Foundation. “They’re staring us in the face. They’re timeworn by the women and men who preceded us … including Eleanor and Franklin Roosevelt.” Among those solutions: A new WPA and Civilian Conservation Corps ; an honest-to-God Industrial policy ; maybe an infrastructure bank like the one proposed by Los Angeles Mayor Antonio Villaraigosa, who spoke at Thursday’s event; and any number of other ideas like the ones I outlined in my ill-fated America Needs Jobs series. What’s needed now, said Roger Hickey, one of the event’s organizers, is a robust, job-creating agenda that progressive candidates can run on in 2012 — an agenda that shows that “we’re not just asking people to have patience and cross their fingers and hope the economy gets better.” What explains the extraordinary disconnect between the public agenda and public policy? The toxic effects of mounds of corporate money on the political process was pretty much everyone’s top choice on Thursday, but it wasn’t the only one. Lake, for instance, said part of the problem is that many of the nation’s most prominent economists see things from the Wall Street perspective. And, of course, there’s another usual suspect: “The public is horribly served by the news media right now,” she said. ( The Nation ‘s Chris Hayes recently blamed the “incomprehensible” disconnect on “a governing elite that is profoundly alienated from the lived experiences of the millions of Americans who are barely surviving the ravages of the Great Recession.”) Kuttner put his finger on another problem, which is the lack of a genuine grassroots social movement advocating for jobs. Looking back through the last 50 years of American history, he said, in every single area where society has made great strides, “people built a movement with immense personal risk and immense courage.” Launching that sort of movement around jobs was, as it happens, the central goal of Thursday’s meeting. And coming just hours after Gov. Scott Walker used a quarterback sneak to break Wisconsin’s public unions , several speakers spoke of a possible inflection point in the making. Trumka said his message to Walker was a big “thank you.” He suggested Walker be presented with the “mobilizer of the year award.” Walker’s move was so outrageous that it might be enough to change the national conversation “from deficit hysteria to where it belongs, to jobs and the right to build middle-class living standards,” Trumka said. “This is a debate that we’ve wanted to have for 20 to 25 years.” Now, he said, “it’s our job to channel this Midwest uprising.” Wade Henderson, the head of the Leadership Conference on Civil and Human Rights, said Walker’s “unprecedented assault on collective bargaining and the right to organize is arguably the most significant challenge to civil and human rights in this early part of the 21st century.” The response to it, he said, “may well determine the future of this great nation.” Robert Borosage, the co-director of the event’s sponsoring organization, described how the powerful, spirited grassroots movement that got Barack Obama elected president basically came to a dead stop right after the election, figuring Obama would then take the lead in such areas as job creation. It didn’t work out that way, of course. “What Wisconsin is doing is pushing the start button,” Borosage said. “And now we’ve got to build again.” ************************* Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail , bookmark his page ; subscribe to his RSS feed , follow him on Twitter , friend him on Facebook , and/or become a fan and get e-mail alerts when he writes.

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Raymond J. Learsy: Peak Oil. The New York Times’ Op-ed Gets it Right and Wrong

February 28, 2011

On Friday, two weeks after the issue was discussed at length in the Huffington Post, “WikiLeaks Brings Misguided Joy to Preachers of Peak Oil” 02.10.11 the New York Times found the wherewithal to present us with Michael Lynch’s Op-ed, “Drilling For an Oil Crisis” 02.25.11. The Times piece covers virtually the same territory, namely that the Wikileaks revelation of an American diplomat’s dispatch about the constraints of Saudi oil reserves gave false credence to the peak oil theorists and rendered unto the peak oil pranksters erroneous and misguided bragging rights which they happily exploited to push their agenda that oil production has “entered a terminal decline.” The Times’ Op-ed, as did the earlier Huffington Post piece, raises serious doubts about the ‘peak oil’ theory. Lynch hits the issue squarely on the head when he comments about Saudi Arabia “Officials there have discovered approximately 70 major oil fields that they’ve left untapped over concerns that increased Saudi production would cause global oil prices to collapse.” Well and good and so much for the timeliness of the New York Times’ revelations. However, then the Times piece goes seriously off track. Ascribing blame on the ‘peak oil’ crowd’s lamentations that oil’s production has “entered a terminal decline”, bolstered by the Wikileaks revelations, as the motivating factor in the Obama administration’s “throwing federal subsidies – some $8 billion in the 2012 budget at all sorts of unproven, unrealistic and inefficient energy technologies like wind farms and electric cars.” That “we should not let a false panic over disappearing oil reserves lead into rushed government investments.” Wrong, and wrong once again! Concern about disappearing oil, real or imagined plays a role, but the motivating impulse toward alternative energy technologies is far more fundamental. Perhaps, better said it is ‘existential’ touching on the very existence of life on the planet. The environmental threat to our existence and that of generations to come grows every day. Seeking non fossil fuel solutions to our energy needs are not “rushed government investments” as the Op-ed piece pontificates. And they are hardly “rushed.” They are already several generations overdue.

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GOP Budget Would Cut Consumer Protection Agency’s Funding In Half

February 16, 2011

With reporting by Ryan Grim WASHINGTON — A new federal budget proposal from House Republicans would dramatically restrict the budget of the new Consumer Financial Protection Bureau during its first year of operation. No House Republicans voted for the Wall Street reform bill that created the CFPB, which is currently being set up by consumer watchdog Elizabeth Warren. Several House Republicans have suggested cutting the agency’s budget, however, as a method of restricting its capacity to regulate. The language included in the House GOP’s budget proposal for 2011 would restrict the CFPB’s annual budget to $80 million– a major cut from the $143 million the agency expects to spend as it hires staff and implements new systems to get off the ground. Warren warned Congress against creating a weak agency last summer, as lawmakers sought to placate Wall Street lobbyists. She insisted that the new CFPB must be given the authority and resources to prevent bank abuses. “My first choice is a strong consumer agency,” Warren said in an interview with the Huffington Post last year. “My second choice is no agency at all and plenty of blood and teeth left on the floor.” The Republican attack on the CFPB’s funding would only apply to this year, but would make launching the new agency very difficult, and send a very aggressive signal about Congress’ intent to follow through on the bill it passed in July. Regulations cannot be enforced if regulators do not have the budget to hire staff. Rep. Barney Frank (D-Mass.), the top Democrat on the House Financial Services Committee, told HuffPost that Democrats would be offering an amendment to strip the CFPB language from the GOP budget plan. The amendment will likely come up for a vote on Thursday. “When you’re talking about $143 million or $80 million you’re talking about several multiples of a bank bonus,” Frank said. “It just shows the disproportion between what the banks have and what they have.” Last year’s Wall Street reform legislation tied the CFPB’s budget to the Federal Reserve’s operations, requiring 12 percent of all funding for the central bank to be diverted to the CFPB. The new House GOP budget proposal, known as a continuing resolution, or CR, would block the Fed from disbursing more than $80 million during fiscal year 2011, which ends in October. Some estimates suggest that the CFPB could receive as much as $550 million a year under the existing funding structure– less than half of the Securities and Exchange Commission’s current budget. That funding will be needed as the new agency staffs up– the CFPB is tasked with regulating a broad array of consumer lending, from payday lending to credit cards to mortgages, many of which have been prone to abuses in recent years. “Remember, the consumer bureau doesn’t just deal with credit cards, it’s a major way to go after all these unregulated financial industries, payday lenders, check cashers, etcetera,” Frank told HuffPost. Connecting the CFPB’s budget to the Fed was a move that consumer advocates hoped would protect the new agency from this type of appropriations gamesmanship. If any new budget law can direct the Fed how to spend its resources, Wall Street-friendly Republicans are likely to continue trying to restrict the CFPB’s budget. Other bank regulators are funded by special taxes they levy against the banks they regulate, known as “assessments,” which are not subject to the Congressional appropriations process. In a speech yesterday before the Consumer’s Union, Warren warned that, “Politicizing the funding of bank supervision would be a dangerous precedent, and it would deprive the CFPB of the predictable funding it will need to examine large and powerful banks consistently.”

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Dal LaMagna: "Hail Mary" or "Hail Arianna"?

February 8, 2011

Ken Auletta at the New Yorker is saying that the AOL acquisition of the Huffington Post is Tim Armstrong’s “Hail Mary” pass for AOL. Since yesterday’s announcement AOL’s stock has been failing towards its yearly lows of $19.52 now at $20.50 as I write this. I say this is a “Hail Arianna” pass that will be caught. How can one person make the difference in the fortunes of a company? Think Steve Jobs of Apple, Larry Ellison of Oracle, Bill Gates of Microsoft, Larry Page of Google, and Mark Zuckerberg of Facebook. Arianna is now the president of the Huffington Post Media Group an AOL Company with a domestic audience of 117 million people. I was an original investor in Arianna Huffington’s Huffington Post back in March of 2005. Why? I wanted to see an effective progressive voice operating online. Back then Arianna was a consummate blogger who relentlessly and effectively articulated many of our frustrations with the Bush administration particularly its march into Iraq. Back then Arianna met Ken Lerer a genius strategist and teamed up with him to create the Post. Ken helped built the infrastructure around Arianna turning the blogger she once was into an institution. Last year Arianna met Tim Armstrong the new CEO of AOL and now he teams up with her supplying the infrastructure that multiplies the reach of the Post fivefold. Yes, I made a very nice return on my investment. I am using part of it to aggressively buy up AOL stock and while saying my Hail Ariannas.

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Jeff Conlon: Setting the Record Straight on Kaplan University’s Courtesy Registration Policy

January 7, 2011

Readers of the Huffington Post reporter Chris Kirkham’s story, ” At Kaplan University, ‘Guerilla Registration” Leaves Students Deep in Debt ,” could not help but conclude that Kaplan University used something called “guerilla registration” to enroll students without their knowledge and then charge them for courses they never took. The allegation by a former employee, who claimed he never actually engaged in the practice but said he had heard about it, is a gross distortion of Kaplan’s actual policies. Kaplan University is proud of its “courtesy registration” policy, whereby its students — most of whom hold down full- or part-time jobs and are often heads of households — can be pre-registered by their academic advisors for the next course or courses prescribed within their academic major as a safeguard to help them avoid missing a registration cut-off date and delaying their studies. This courtesy registration cannot result in a student being charged without the student’s consent. That’s because our students are not charged tuition for a course unless and until they actually join and participate in the class once the term has begun. Students also have the opportunity to drop any class — at no charge — during the first week “add/drop” period of each term. We also recently introduced the Kaplan Commitment, which offers a further safeguard for new students, who can enroll without any financial obligation for the first five weeks of their course to ensure they are satisfied with their selected program and our faculty are satisfied with their ability to handle the work. At Kaplan Higher Education, we are dedicated to helping our students succeed. We take pride in the more than 275,000 Kaplan graduates who have been able to improve their lives by advancing their education with us.

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Hidden Gem: Jewelry Entrepreneur Launches An NYC Boutique On Wheels

December 28, 2010

Parked under the hi-line walkway on the outskirts of Manhattan’s Meatpacking District, you might find the Styleliner, a 1999 Chevy truck filled with rare fashion accessories. Joey Wolffer, the truck’s owner and operator, hand-picked the items she sells aboard the 20-foot boutique on wheels from showrooms in Athens, Greece and marketplaces in Marrakesh, Morrocco, among other unusual locales around the world. “What’s fun for me are the marketplaces. The hippy market in Rio [de Janeiro] was insane. It was colors everywhere — wovens, stones. It’s so exciting to be in those places and so inspiring as well,” says Wolffer. Wolffer first learned the thrill of the hunt as a buyer for Top-Shop and Jigsaw in London, then honed her eye for unique styles as a senior jewelry designer for Nine West. The accessories aboard the Styleliner, ranging from $30 to $1,800 a piece, reflect this professional experience as well as the designer’s insatiable thirst for entrepreneurship and travel — which ultimately impelled her to flee the world of corporate fashion. In the latest installment of the Huffington Post’s Accidental Entrepreneurs Series , Huff Post’s Samira Nanda caught up with Joey Wollfer to find why she left behind a career at a well-known brand to launch her own mobile shop in one of the most competitive fashion markets in the world. (Shooting and editing by Hunter Stuart.) You can also check out Huff Post’s Creative Minds interview with Wolffer here . Want your small business featured on the Huffington Post? Send details about your business to nhindman@huffingtonpost.com

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Michael Likosky: Top 10 List for 2010: Infrastructure

December 25, 2010

1. Top Huffington Post Blog Chris Matthews: “Infrastructure as Monument” 2. Top Presidential Speech President Obama: “Our Generation’s Sputnik Moment is Now” 3. Top Infrastructure Journalist Rachel Maddow 4. Hardest Working Man in Infrastructure Pennsylvania Governor Ed Rendell 5. Best Statement in Support of an Infrastructure Bank Senator Kerry to Banking Committee 6. Best Report on the Stimulus Act & Infrastructure President’s Council of Economic Advisors Fourth Quarterly Report 7. Most Effective Consensus Builder Congresswoman Rosa DeLauro (Conn.-3) 8. Best Advocates for a Bi-Partisan Approach Building America’s Future 9. Best Infrastructure Statesman Ambassador Felix Rohatyn 10. Top Infrastructure Philanthropist Bernard Schwartz

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Don McNay: A 60 second explaination of immediate annuities

December 21, 2010

This 60 second video produced by Mary Ashley Burton and featuring Don McNay, (author, columnist and Huffington Post contributor) gives a simple explanation as to how immediate annuities work. You can learn more at www.donmcnay.com

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Andy Plesser: The Huffington Post Hits Record 23 Million Unique Visitors in November, Now Ranked Number Two "Newspaper," comScore

December 17, 2010

The Huffington Post has registered 26 million unique monthly visitors in the United States, a record for the site, according the comScore November data for the “Newspaper Sites.”

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WATCH: How One Entrepreneur Built Her Company Amid Detroit’s Wreckage

November 23, 2010

When Torya Blanchard was a child, she was caught shoplifting from a local store on the eve of a family trip to Paris. Given the timing of the transgression, her immediate grounding was all the more painful. Only good girls get to go to Paris , her mother told her. Crushed, Torya quickly cleaned up her act, but never forgot Paris. As an adult, she took a job at a Detroit public school where she taught French for five years until her passion for Paris and its cuisine, sparked years before by her mother’s slap on the wrist, finally bubbled to the surface. Blanchard quit her job in 2008 at the age of 31. She cashed out her 401(k) and, without any business or restaurant experience, used the $20,000 to open up a tiny creperie in downtown Detroit. In the spirit of her mother’s motto, Ms. Blanchard named it Good Girls Go To Paris . Good Girls was born during a bad time in Detroit — amidst abandoned factories , vacant commercial buildings, and homes that were either boarded up or bulldozed. The median home price in the city fell to $7,500 in December 2008 while the jobless rate jumped to nearly 50 percent over the next year. Weak demand in the Motor City’s sputtering real estate market enabled Blanchard to rent out space on the cheap. And her risky bet that the neighborhood would buy low-cost, high-quality crepes, a dish she says most locals had never even heard of, has paid off. Today, business is booming. Good Girls offers 40 different types of crepes, has expanded to a midtown location, and is about to open another spot. “When I started out, [Good Girls] was 48 square feet and it’s moved to 1,000 square feet. I have more employees, I’m able to give employees that want it insurance — and I’m able to insure myself,” Ms. Blanchard told Huff Post. In the first installment of The Huffington Post’s new video series on individuals who dove into entrepreneurship after losing or leaving their nine to five, we give you the story of Torya Blanchard and her Detroit creperie, Good Girls Go To Paris. Watch the story below: Did you start a business after leaving or losing your job? Want your story featured on The Huffington Post ? Contact us at: nhindman@huffingtonpost.com

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9 Companies Working It In The World Of Social Media

November 17, 2010

The Huffington Post & APCO recently partnered for a study on social media effectiveness. by surveying 4,000 social media informants, we found six factors that define success: dialogue, customer service, quality of content, platform diversity, engagement/interaction and optimization. We applied this criteria to Fortune ‘s 40 Most Admired Companies and here are the nine that came out on top…now it’s YOUR turn to rate them!

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Evan Kraus: What Companies Can Learn From Social Informants

November 17, 2010

You often hear companies, organizations, and even celebrities claim social media success based on how many fans, friends and followers they have. But is that really an accurate measure of success? We at APCO believe that influence is a far more important gauge than raw numbers. Those Internet users with the most influence among their peers don’t just have followers — they have engaged followers. And by promoting this engagement, these influencers — a group we call Social Informants — have the ability to build buzz behind new products and spark debate with new ideas, creating a ripple-effect by sharing information. According to new research we’ve done with the Huffington Post, Social Informants spend nearly 200 percent more time online than average Internet users and are 56 percent more likely than online news readers to have over 100 people in their social network. These are the people corporations and organizations want to reach – and who we want to better understand. To get a better handle on the behavior of these users, we conducted a new study that examines what we are calling Social EQ — the expectations Social Informants have for how companies use social mediato market their products, shape their reputations and advocate for the ideas in which they believe. Based on opinion polling conducted among this group, we were able to isolate the six key factors Social Informants view as cues that a company’s social media presence is effective and worth supporting. We stress-tested our Social EQ model against Fortune’s 40 most admired companies , and got a Social EQ index score for each. When we re-ranked these companies according to these scores, the list was drastically different. One thing we noticed right away: tech companies dominated the top of the re-ordered list. You might think it’s just because they are “tech,” but then why are some tech companies near the bottom of the list? We believe you need only look to Social EQ’s most important effectiveness factor – dialog. This factor is based largely on whether company leaders and employees are actively using social media. It makes sense: allowing people to directly connect to people inside a company, especially at the top, makes the company feel more human and makes participating in its social media efforts feel more impactful and worthwhile. And because the CEOs of tech companies are frequently more comfortable with social media, they more regularly participate in these types of activities. We were surprised to discover that companies that are heavily investing in emerging social media platforms aren’t necessarily rewarded for it in terms of Social EQ. Yes, taking risks and demonstrating innovation gets you some credit among Social Informants, but our respondents were much more impressed by companies that ensure their various social media efforts are well integrated with each other and with the company’s overall Web presence. And you get bonus points if your social media outreach is optimized and easy to find. Companies with the best content and the most interactivity didn’t automatically outperform those without these attributes. While quality content and customer engagement are both very important, creating the perception that you openly solicit feedback and have a responsive and transparent social media-based customer service function carries more weight with Social Informants. Some companies have social media programs that we would have expected to score much better in the Social EQ model than they actually did. This is because, when it comes to Social Informants, perception matters more than reality. Those companies might be doing all the right things, but the Social Informants don’t yet recognize them for it. That’s a communication gap worth closing. These findings may have a significant impact on the way companies approach their corporate communication and marketing in the digital world. The link between successful social media engagement and an enhanced reputation is clear. Not engaging isn’t an option. Our findings show that companies will be better able to understand and leverage social media if they follow these important trends… 1. Because employee participation is so important, evolve the job of the communication leader away from message scripter and into story harvester, social media trainer, and internal communication cheerleader. 2. Transform customer service from a function designed to respond to in-bound inquiries into an active, information-seeking team of investigators, mining platforms like Twitter, Epinions and Amazon.com for disaffected customers and then deftly and respectfully converting those moments of frustration into opportunities to excel. 3. Let the tools, communities, and platforms take a back seat to a highly integrated approach. Don’t assign people to manage the company’s Facebook page or Twitter feed. Those are now office utilities, like electricity and paper. Instead, teach business managers and their communication staffers how to apply these new tools to resolve business problems in a holistic way. 4. Make sure awareness of your efforts remains high, and that you regularly track how they are being perceived. In a world where 87 percent of consumers trust a friend’s recommendation over a critic’s review , and social network users are three times more likely to trust other social network users’ opinions over advertising , Social Informants play an increasingly important role in communication and marketing. Understanding what motivates them to back specific efforts is crucial. The Social EQ model demonstrates that the typical reach metrics of fans, friends and followers is less important than overall effectiveness as indicated by factors like visibility of leadership, proactivity of customer service, and depth of integration. We believe it will change corporate and business leaders’ perspective on how to prioritize tactics and invest in what matters most. We’d love to hear what you think. Let us know in the comment section. WATCH:

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Dylan Ratigan Honors Seth Reams For His Work With The Unemployed (EXCLUSIVE VIDEO)

October 29, 2010

The Huffington Post celebrated its 2010 Game Changers Thursday evening at Skylight Studios in SoHo. Sean Penn, who was named a 2010 Game Changer, was honored by Anderson Cooper for his work in Haiti. And Dylan Ratigan honored Seth Reams and Michelle King for their inspiring work. WATCH:

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Julia Moulden: Over 50 and at the Top of Your Game? Here’s What’s Next

October 23, 2010

You’ve passed the half-century mark, and a question has been rattling around in your brain: “What’s next?” Recently, you answered it with a single word: “work.” And now you’re beginning to see that you can be part of something unprecedented, that the work you do later in life can be the most satisfying of your entire career. You can, as I describe it, “ripen.” Cool. But now a new question pops up. “What work, exactly?” Loyal readers will know that I’m writing a book called “RIPE: Rich, Rewarding Work After 50.” As I listened to ripe pioneers, I began to see a pattern emerging and plotted a matrix: along one side, the reasons people begin this journey, along the other, the possible paths forward. Where might you be on this matrix? For instance, you might have been successful in your chosen field and are now ready to try something new. You want to break new ground or implement innovative ideas, maybe realize a lifelong dream or assist in the birth of a compelling new vision. Arianna Huffington is a terrific example of this kind of ripening. At 56, she launched the Huffington Post. As a new media model, it would welcome voices not normally heard in the mainstream press: “curated news and instant intelligent opinion for an engaged community,” as she says. HuffPost quickly became one of the most widely read and talked-about new media brands. Many boomers will answer the question, “What work, exactly?” with, “Start a business.” Some of us will do it because it’s something we’ve always wanted to do, others because we can’t find work and need to create it. But hanging out a shingle is suddenly on the upswing, especially among people over 50. Just ask the folks at the Ewing Marion Kauffman Foundation , the world’s largest foundation dedicated to entrepreneurship. Their research shows that the average age of first-time entrepreneurs is now between 55 and 64. “The United States is on the cusp of an entrepreneurship boom — not in spite of an aging population, but because of it.” The Kauffman Foundation is referring to people like Lee Weinstein . Lee and I met when he approached me last year to introduce one of his clients, Icebreaker , an innovative sportswear company from New Zealand. I had no idea he was a ripe pioneer until we started chatting. Turns out he’d spent 15 years working for Nike and knew that it was time to get out and do something new. A two-year process of introspection led to him reinvent his work; he now runs a PR agency with his wife, who also worked at Nike. Not only are they doing well, with just the right number of clients (including Nike), but they have a more balanced life, with time to enjoy the pleasures of not working, too. Which sounds pretty ripe to me. Given the number of emails I’ve received — and the comments on the first few columns about RIPE — I know that you’re all over this idea. We’re eager to hear your stories, so please share how you plan to spend the years between 50 and 100-plus, or feel free to contact me directly via my website. And since we’re on the subject of valuing people of a certain age, are you wondering why this extraordinary group of people who called themselves The Elders aren’t getting press coverage? As I write, The Elders have been in the Middle East for a few weeks, making a unique contribution to the peace process. I know this because I get their media releases. But I haven’t seen anything about their mission in the mainstream media. What’s up with that? Julia Moulden is an author, speaker, and columnist. Read Julia Moulden’s HuffPost archive, including the first columns about RIPE .

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FDIC Called On To Put Bank Of America Into Receivership

October 22, 2010

Charging that the ongoing foreclosure fraud epidemic is the work of precisely the same unrepentant bank officers whose fraudulent mortgage schemes crashed the financial system in the first place, two leading critics of the financial industry are calling on the FDIC to put some of the nation’s biggest banks into receivership — starting with the Bank of America — and make them clean house. William K. Black, a former regulator and white-collar crime expert who cracked down on massive fraud during the savings and loan scandal of the 1980s, and his fellow economics professor at the University of Missouri-Kansas City, L. Randall Wray, write in the Huffington Post that it’s time to “foreclose on the foreclosure fraudsters”. They write: The lenders, officers, and professional that directed, participated in, and profited from the fraudulent loans and securities should be prevented from causing further damage to the victims of their frauds, through fraudulent foreclosures. They argue that, far from being a coincidence, massive foreclosure fraud “is the necessary outcome of the epidemic of mortgage fraud that began early this decade.” The reason for that: The banks that are foreclosing on fraudulently originated mortgages frequently cannot produce legitimate documents… Now, only fraud will let them take the homes. Many of the required documents do not exist, and those that do exist would provide proof of the fraud that was involved in loan origination, securitization, and marketing. This in turn would allow investors to force the banks to buy-back the fraudulent securities. In other words, to keep the investors at bay the foreclosing banks must manufacture fake documents…. Foreclosure fraud is the only thing standing between the banks and Armageddon.” So the only solution, then, is new management. “We should remove the senior leadership of the banks and replace them with experienced bankers with a reputation for integrity and competence, i.e., the honest officers that quit or were fired because they refused to engage in fraud,” Black and Wray write. They suggest starting with Bank of America, which they call “a ‘vector’ spreading the mortgage fraud epidemic throughout much of the Western world.” Looming large among Bank of America’s sins is its purchase of mortgage giant Countrywide Financial long after it became clear that the company had engaged in massive fraud. Even the extremely slow-to-anger New York Fed, which bought billions of securitized mortgages that Bank of America improperly represented as fully documented and conforming to underwriting standards, is now demanding that it buy some of them back . But far from expressing remorse, Bank of America is going on the offensive, announcing it will end its three-week-old freeze on foreclosures in 23 states on Monday, much earlier than expected. Bank of America officials are claiming they didn’t find evidence of unwarranted foreclosures and are vowing to “defend the interests of Bank of America shareholders,” and hire more lawyers, the New York Times reported . “It’s loan by loan, and we have the resources to deploy in that kind of review,” said the bank’s chief executive. Black and Wray write that Bank of America “is sufficiently large and powerful that its receivership will send the credible signal that America is restoring the rule of law and that even the most elite frauds will be held accountable. ” They note that about a thousand receivers were appointed during the S&L and banking crises of the 1980s and early 1990s under Presidents Reagan and Bush. “Contrary to the scare mongering about ‘nationalizing’ banks, receivers are used to returning failed banks to private ownership,” they write. The new managers would “direct the business operations, find the true facts about the bank’s operations, senior managers, and financial condition, recognize the real losses, and make the appropriate referrals to the FBI and the SEC so that the frauds can be investigated and prosecuted,” they write. “The receiver is also a well-proven device for splitting up banks that are too large and incoherent by selling units of the business to different bidders who most value the operations.” On Wednesday, administration spokesmen declined to endorse any dramatic federal action. They declared that they had found no “systemic” threat to the financial system from the foreclosure problems, spoke of “mistakes” and “errors” rather than pervasive fraud and said the banks and servicers now need to “fix” their “processes.” They “cannot even bring themselves to use the ‘f’ word — fraud,” Black and Wray write. “They substitute euphemisms designed to trivialize elite criminality.” The central problem appears to be that Obama Administration continues to see the mortgage and foreclosure crises primarily through the eyes of the banks — not through the eyes of the regular people who became their victims, or even the taxpayers who bailed out the very fat-cat bankers who are now back to their tricks. Black and Wray write: This nation’s most elite bankers originated and packaged fraudulent nonprime loans that destroyed wealth — and working class families’ savings — at a prodigious rate never seen before in the history of white-collar crime. They created the worst bubble in financial history, echo epidemics of fraud among elite professionals, loan brokers, and loan servicers, and would (if left to their own devices) have caused the Second Great Depression. The two professors call for “[n]othing short of removing all senior officers who directed, committed, or acquiesced in fraud.” For more on William K. Black, read my Oct. 20 story on his blistering critique of the press coverage of the financial crisis: Nine Stories The Press Is Underreporting — Fraud, Fraud And More Fraud . ************************* Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail , bookmark his page ; subscribe to his RSS feed , follow him on Twitter , friend him on Facebook , and/or become a fan and get e-mail alerts when he writes.

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Robert Sutton: Bad Boss: 14 Horror Stories About The World’s Worst Bosses From The Author Of ‘Good Boss, Bad Boss’ (PHOTOS)

October 22, 2010

The best bosses are competent at the work they oversee and are in tune with what it feels like to work for them — that’s a central theme in my new book, “Good Boss, Bad Boss.” I show how the best bosses know when to push their people to work harder, when to praise versus criticize their people, and when the best management is no management at all. They are seen as in charge, but have the wisdom to listen to their people closely and to encourage them challenge the boss’s ideas in civilized and instructive ways. They treat their people with dignity and respect, and serve as “human shields,” who protecting their charges harm, distraction, and idiots and idiocy of every stripe. The good news is that, although no boss is perfect, a recent national survey found that 80% of employees feel respected by their bosses and believe their bosses value their work. But there is also strong evidence that the clueless and incompetent minority does massive damage to employee’s mental and physical health – a longitudinal study of Swedish workers found that those with crummy bosses had a 39% percent greater chance of having a heart attack than those with good bosses. And the evidence that bad bosses hamper productivity keeps growing: a recent survey by University Florida researchers found that people with abusive bosses more likely to arrive late, do less work, and to take days off when they aren’t sick. The hallmark of the worst bosses is that they suffer from power poisoning : They focus on satisfying their own needs and wants, devote little or no attention to the needs and wants of their followers, and they act like the rules don’t apply to them. This cluelessness manifests itself in many ways; for example, one study showed that people in power were more likely to grab more cookies and to eat like pigs. To give Huffington Post readers a sense of the horrific actions of the worst bosses and, to entertain you a bit too, I put out a call on my blog Work Matters for stories about “clueless and comical bosses.” Between comments on the blog and emails from readers, I received approximately about 200 examples; although many were funny, some were just plain sick and even downright cruel. Here are the 14 worst: I would love to hear more stories about clueless bosses from The Huffington Post readers — as well as tips and stories about how bosses can avoid living a fool’s paradise and, instead, stay in tune with what it feels like to work for them. Again, the following stories featured in the slide show were submitted by readers — some are ridiculous, some are scary and some might be downright offensive. But hopefully all are instructive.

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Obama Team On Furor Over Foreclosures: ‘Problem For The Banks and Servicers To Fix’

October 20, 2010

U.S. Housing and Urban Development Secretary Shaun Donovan said Wednesday that the Obama administration will attempt to protect homeowners and police the kind of paperwork fraud that led the nation’s largest banks to temporarily halt foreclosures this month, but added that the administration had yet to find anything fundamentally flawed in how large banks securitized home loans or how they foreclosed on them. “Where any homeowner has been defrauded or denied the basic protections or rights they have under law, we will take actions to make sure the banks make them whole, and their rights will be protected and defended,” Donovan said at a Washington press briefing. “First and foremost, we are committed to accountability, so that everyone in the mortgage process — banks, mortgage servicers and other institutions — is following the law. If they have not followed the law, it’s our responsibility to make sure they’re held accountable.” He added, however, that the administration is focused on ensuring future compliance, rather than on looking back to make sure homeowners and investors weren’t harmed during the reckless boom years. The administration is “committed to forcing institutions to change the way that they conduct business,” Obama’s top housing official said, “to make sure these problems don’t happen again.” Donovan said HUD began a review earlier this year of the five largest mortgage companies it deals with on government-backed mortgages through the Federal Housing Administration. The review focuses on how the companies attempt to keep delinquent borrowers in their homes and how they transition homeowners who have been foreclosed on out of their homes. “We are very focused on making sure … steps are being taken early in the process is to keep people in their homes,” Donovan said. Within the foreclosure process, the probe examines how mortgage servicers — firms that collect payments from homeowners with a mortgage — handled the various affidavits employees were supposed to carefully review, sign and notarize in order to carry out a foreclosure in states that require a court’s approval, and how the firms performed the final stages of a foreclosure. Donovan said the administration had yet to complete its review, which began in May. Thus far, though, it had found “significant difference in the performance of servicers, and in particular, information that shows us there is not compliance with FHA rules and regulations around loss mitigation.” Donovan said the findings were limited to firms that deal with FHA loans. He declined to single out servicers. Other HUD officials likewise declined, despite repeated requests. When it came to the larger issue of what some legal experts describe as a fundamentally-flawed and fraud-ridden mortgage market — fraudulently-underwritten loans that passed through a maze of institutions that failed to properly maintain basic paperwork or follow legal procedures in bundling, securitizing and ultimately selling those mortgages to investors — Donovan said that, thus far, all is well. “The primary issue that’s been the focus of the moratoria is, is the foreclosure process being followed correctly? Are affidavits being filed correctly, and are notarizations and other things being done correctly? That is one set of issues,” he said. “A second set of issues — and we think this is very important — that we look more broadly at, ‘Are servicers taking steps to help keep people in their homes?’” The lesser, third issue that has been raised, Donovan said, is whether the process underlying the securitization of mortgages is “in question.” “So that’s the point that I’m trying to make, is that the issues that we are finding … that we’re focused on are, ‘Are there particular servicers that are not following these processes?’” Donovan added that “we have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed.” That review, however, is fairly new. Experts in mortgage processes, housing law and bankruptcy say the practices employed by the big mortgage originators, securitizers and servicers is largely flawed, and that in some cases the basic process of how a loan came to be securitized and sold can be legitimately questioned. It’s unclear how hard the administration looked into the matter prior to Donovan’s diagnosis. Meanwhile, several state officials have called for a foreclosure moratorium. All 50 state attorneys general — Republicans and Democrats alike — are investigating servicer behavior. Many have vowed to get to the bottom of the mortgage mess, and at least one has already launched a lawsuit. The state attorneys general say the large mortgage companies may be engaging in “deceptive” practices, a legally loaded term. Some large servicers voluntarily halted foreclosure sales. Michael Barr, an assistant secretary at the Treasury Department and one of Timothy Geithner’s top lieutenants, offered a clarification at the press briefing. “When the word ‘systematic’ or ‘systemic’ is used in this context, I think Secretary Donovan was referring to the safety and soundness of the financial system, not saying that there couldn’t be significant real problems that affect real people in a very, very real way,” Barr said. “We are seeing that, and that is why we are stepping up to the plate and making sure that those problems get corrected.” The officials announced that on Oct. 6 the Treasury Department sent a letter to all mortgage servicers participating in the Obama administration’s Home Affordable Modification Program, reminding them that they must certify that all pre-foreclosure options, such as a modification or a short sale, have been exhausted before a servicer repossesses a home. Homeowner advocates have said that HAMP, under which more borrowers have been booted from their homes than have received permanent relief from their servicers, has shown that the companies rush to foreclose without first exhausting other options — an act directly contravening the administration’s promise to voters. “Treasury did have a robust and does have a robust compliance system in place,” Barr said of HAMP, which was the administration’s main effort to help three to four million strapped borrowers stay in their homes. “When we have found problems we have ordered them to be corrected and they have been corrected.” A government audit this year found that servicers routinely made mistakes, and that those mistakes may have improperly booted thousands of homeowners from the program. The Treasury Department now conducts quarterly “Second Look” reviews of HAMP servicers. The most recent review found that “fewer than 5% of loans sampled from large servicers were evaluated incorrectly by the servicer,” documents show. “Where applicable, servicers are required to forestall foreclosure sales and reevaluate these homeowners under HAMP guidelines.” Treasury has no procedures in place for sanctioning servicers under the program. To date, not a single fine has been levied. When pressed how much longer the government’s review would take, Donovan estimated another nine weeks, placing its completion the week before Christmas. Barr had a less committal answer. “This is not a problem for Secretary Donovan to fix,” Barr said. “This is a problem for the banks and servicers to fix. They can fix it as fast as they feel like it.” Business Writer William Alden contributed reporting. ************************* Shahien Nasiripour is the business reporter for the Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455. Arthur Delaney is a staff reporter for the Huffington Post. He can be reached at arthur@huffingtonpost.com.

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Community Banks Find ‘Once In A Lifetime Opportunity’ In California

October 19, 2010

The Huffington Post’s Willow Bay sits down with Opus Bank’s Stephen Gordon to discuss what makes today a ‘once in a lifetime opportunity’ for community banks in California, and those challenges still faced by the banking industry at large.

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Job-Creation Idea No. 10: A Lower Dollar Would Level The Playing Field

October 15, 2010

(No. 10 in Huffington Post’s America Needs Jobs series.) With the Federal Reserve indicating that it’s ready to print more money to keep interest rates down, the dollar appears to be headed lower against foreign currencies. The big question, though, is whether the dollar will lose enough value — and fast enough — to make a difference in the nation’s job picture. As long as the dollar remains high, it acts like an enormous tax on U.S. exports and a massive subsidy for U.S. imports. That’s an equation for losing jobs, particularly in the manufacturing sector. As progressive economist Dean Baker explains: If the dollar is 30 percent over-valued, then it means that we are effectively providing a subsidy of 30 percent for imports and imposing a tariff of 30 percent on exports. As people who understand economics know, the over-valued dollar is the main reason that we have a trade deficit. If we got the dollar down, then our manufacturing industry would be much more competitive. C. Fred Bergsten , director of the Peterson Institute for International Economics calls the exchange rate the most important factor in determining U.S. export competitiveness: Every increase of 1 percent in the dollar, averaged against other major currencies, reduces our exports by about $20 billion annually and destroys about 150,000 jobs. The recurrent overvaluations of the past 30 years, when the dollar became overpriced by 30 to 40 percent, contributed significantly to the decline in manufacturing jobs and was the major cause of the huge current account deficits of most of that period. The policy goal should be a competitive exchange rate that produces a sustainable trade balance, rather than a “strong dollar.” This would help both sides of the trade account, strengthening the ability of U.S. firms and workers to compete with imports as well as to export. A big part of the problem, of course, is China, which artificially undervalues the renminbi by somewhere between 20 and 40 percent. I wrote about that earlier in my America Needs Jobs series. But the dollar needs to come down against other currencies, too, in order to level the playing field. Clyde Prestowitz , a former Reagan administration official who runs the Economic Strategy Institute, argues that the dollar is key to turning around America’s decline: I think we need to really mount a major effort to reset the global exchange rates. Other currencies need to revalue against the dollar so the dollar would be worth relatively less. And I’d like to be able to do that through negotiations in the International Monetary Fund and even in the World Trade Organization. I think we should try that. American University economist Robert Blecker estimates that the increases in the dollar’s value from 1995 to 2004 lowered U.S. manufacturing investment by 61 percent relative to what it would otherwise have been. Since then, the dollar has gone down. “In fact the dollar has fallen a lot, it’s been trending downward for eight years. But not with the currencies where we have our biggest trade deficit,” Blecker told the Huffington Post. “It has not fallen nearly enough with the Chinese yuan and other east Asian currencies.” Blecker said he thinks it’s too late to get a lot of the lost jobs back, particularly in industries that have been the most hard-hit here, such as textiles and apparel. But, he said, what a lower dollar could do “is attract more of the industries of the future to remain here, or remaining industries to not offshore more.” It could also boost exports. “In 2006, 2007, we were seeing really strong growth in exports,” Blecker said. “It was one of the strongest points in the economy, before the financial crisis. And I think that was an effect of the lower dollar.” Support for devaluing the dollar is not universal among progressive economists. Former labor secretary and Berkeley professor Robert Reich blogged for HuffPost earlier this month criticizing the Obama administration for “actively pursuing a weak dollar as a jobs policy” and warning of currency wars and higher import costs. “It’s no big accomplishment to create jobs by getting poorer,” he wrote. Blecker agreed that there is some reason to worry about currency wars, and that some lost American jobs might simply move around, rather than come back. But, he said, there’s no doubt it would be good for exports. And, he noted: “Making imports more expensive is exactly how you hope to have industries locate here instead of there.” COMING NEXT IN THE AMERICA NEEDS JOBS SERIES: Buy American Have you missed any of the previous installments of HuffPost’s America Needs Jobs series? Read the introduction , Idea No. 1: A Payroll Tax Holiday , No. 2: Rescue The States , No. 3: The Joys Of Retrofitting , No. 4: Put Young People To Work , No. 5: Gearing Up For Climate Change , No. 6: Sharing The Pain Of Layoffs , No. 7: Drawing A Line With China , No. 8: Time For A New WPA , and No. 9: Encourage Banks To Lend — Or Else . Got an idea you think we may be overlooking? Email froomkin@huffingtonpost.com . ************************* Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail , bookmark his page ; subscribe to RSS feed , follow him on Twitter , friend him on Facebook , and/or become a fan and get e-mail alerts when he writes.

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Delaware Senate Candidate Chris Coons Backs One-Month Moratorium On Foreclosures

October 14, 2010

Delaware’s Democratic U.S. Senate candidate Chris Coons is backing a moratorium on foreclosures, joining a growing number of national Democrats calling for a freeze. “We’ve got almost 3,000 Delawarians facing foreclosure, and as someone who’s had personal experience with the difficulty, the pain, the dislocation of losing a home, we need to make sure the process is as fair and as transparent as possible,” he told The Huffington Post in an interview on Thursday. “I support a national month-long moratorium in the foreclosure process, so we can assess how broad the problem is, how deep the problem is, and make sure that we’re protecting our markets and protecting the process. … We need to make sure the foreclosure process is fair and that the banks aren’t inappropriately or without cause foreclosing on people,” Coons added. The issue of a foreclosure moratorium or investigations is something that national Democrats have been tackling aggressively, with lawmakers such as Senate Majority Leader Harry Reid (Nev.) and Reps. Alan Grayson (Fla.), Debbie Wasserman-Schultz (Fla.), and John Conyers (Mich.), among others, calling for a moratorium. But as The Huffington Post has reported, Republican lawmakers have largely stayed silent on the issue , with the exception of a few, such as Sen. Richard Shelby (Ala.). The Obama administration is also opposed to a moratorium and facing increasing heat from progressives. Support for investigations and/or a moratorium have been much more bipartisan on the state level, with all 50 attorneys general joining together in a coordinated effort to investigate mortgage fraud. The issue has begun making waves on the campaign trail, with several Democratic candidates speaking out . Coons wasn’t ready to commit to joining a theoretical Progressive Caucus in the Senate, which Illinois’ Alexi Giannoulias has said he would like to create if he goes to Washington . Coons said that he considers himself “solidly progressive” on many issues, adding, “I think that folks would consider me strongly in the progressive tradition in my position on civil rights, and tolerance, diversity, and inclusion.” But without having a firmer idea of what a progressive caucus would be, he wasn’t ready to give a definitive answer. In Wednesday night’s debate with Republican Christine O’Donnell, Coons said he strongly disagreed with the Supreme Court’s Citizens United decision. “Sunshine is the best disinfectant, and in politics, it is best for us to disclose as fully and as broadly as possible, who is making contributions,” he said. When asked by The Huffington Post on Thursday whether he would be open to public financing of campaigns, Coons indicated an openness to exploring other options. “I think if we can find a way to provide an alternative mechanism for financing campaigns at the state level or the federal that’s fair, that’s transparent, that levels the playing field between folks with access to lots of resources and folks that are strong candidates but don’t want to spend all their time chasing money — that would be a good thing and that would move our politics forward,” said Coons. Tuesday night’s debate was the first face-off between Coons and O’Donnell, but it wasn’t supposed to be. Delaware’s federal candidates met for an hour-long forum on health care at a major hospital in the state on Wednesday, but O’Donnell did not show up because her staff was reportedly ” not aware of the invitation to participate .” “[I]t was an interesting conversation debating health care largely with myself,” Coons said. Coons and O’Donnell met for a second debate Thursday afternoon, and they now have three more scheduled before the election. ************************* What’s happening in your district? The Huffington Post wants to know about all the campaign ads, debates, town halls, mailings, shenanigans, and other interesting campaign news happening by you. E-mail us any tips, videos, audio files, and photos to election@huffingtonpost.com .

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DNC Makes Major Ad Buy Accusing Chamber Of Potentially ‘Stealing’ Election

October 10, 2010

Ratcheting up the debate over the influence of outside groups in congressional elections, the Democratic National Committee has made a major ad purchase pushing the case that the November elections could very well be “stolen” by foreign influences. The committee is airing a spot on national cable this coming week that turns an already harsh spotlight on the roles being played by former Bush strategists Karl Rove and Ed Gillespie in addition to the Chamber of Commerce. Pivoting off reports that the business lobby has used foreign donations for its campaign activities, the spot ends with fairly conspicuous if not ominous shot of Chinese currency being stacked up — ostensibly for use against Democratic candidates. “Karl Rove, Ed Gillespie: They’re Bush cronies. The US Chamber of Commerce: They’re shills for big business,” the ad goes. “And they’re stealing our democracy. Spending Millions from secret donors to elect Republicans to do their bidding in Congress. It appears they’re even taking secret foreign money to influence our elections. It’s incredible, Republicans benefiting from secret foreign money. Tell the Bush Crowd and the Chamber of Commerce – stop stealing our democracy.” The spot, timed to preempt Rove and Gillespie’s appearances on the Sunday talk show circuit, echoes what has quickly and clearly become the closing argument Democrats (from the White House on down) are making as the election nears. But it comes at a time of conflicting reports over the veracity of the charges. On Saturday the New York Times published a story questioning a basis of the report uncovering the Chamber’s foreign pools of cash. Specifically, the story quoted White House counsel Bob Bauer acknowledging that there was no specific evidence that the Chamber had crossed legal lines by using foreign money for its electioneering. “The DNC ad is rubbish,” said Tom Collamore, senior vice president of Communications and Strategy for the U.S. Chamber. “The U.S. Chamber will continue to discuss ways to create jobs and grow the economy no matter how often others may try to change the conversation. We’ve been working for growth, jobs, and opportunity for 100 years and we won’t be deterred now.” The Center for American Progress, which runs the Think Progress site that published the original report, has responded to critics by noting that the fundamental question at the heart of the debate had still not been answered: “How many foreign sources of funding does the Chamber have?” A spokesman for the DNC, likewise, pointed to a lack of transparency and disclosure on the part of the Chamber as the basis for the ad. “They all can, of course, clear all this up by releasing their donors,” said DNC Communications Director Brad Woodhouse. “We just think that it is vital that the American people know that this election is on the verge of being stolen by secret donors, anonymous special interests, and possibly foreign corporations. And these folks aren’t lurking in the shadows refusing to reveal themselves and their intentions and interests because they have the greater good in mind. It’s because they want to get their fingers back in the till and exert the influence they had when Republicans were last in charge. A spokesman for the Chamber did not return a request for comment asked for late Saturday night (when the Huffington Post was first sent the ad).

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Elizabeth Warren, Sensing Opportunity, Wants To Ease Burden On Lenders To Help Families

October 7, 2010

White House adviser Elizabeth Warren wants to make it easier for consumers to understand loan products by reducing the amount of “useless” information and paperwork that lenders are required to disclose, easing the burden placed on small lenders due to government red tape while boosting their ability to compete with large banks, the consumer advocate told The Huffington Post. In an interview last week in Washington, Warren reiterated her call for a more flexible approach towards government regulation of consumer credit products, emphasizing that excessive “thou shalt nots” create more confusion thanks to the proliferation of excessive disclosure forms while driving up the lenders’ costs to comply. Instead of rules, regulators should adopt a regime based on core principles — like fairness. “It breaks my heart to say this, but I think the word ‘disclosure’ has become a dirty word,” she said. “What it’s come to mean is layers and layers of fine print that nobody reads and nobody understands. Indeed, it’s worse than useless because it is shrubbery to hide muggers,” Warren said in a reference to lenders who use complex disclosure forms to hide fees. Warren’s idea — simple, concise agreements — appears to be at the top of her agenda, based on the interview and her public statements since joining the Obama administration. In a speech last week to the Financial Services Roundtable , a Washington trade group representing the nation’s biggest financial institutions, the former bailout watchdog told the assembled bankers that many of them shared her vision, too. And like lenders, Warren doesn’t believe more pages of government-mandated fine print is the answer. “The idea that what we’re talking about in trying to make these products clear is six more pages of disclosure is the wrong project,” she said. “This is really about, in fact, pushing away some of that and getting it down to the whole basic deal.” The agreements should be “short, easy to see, easy to read. The key principle here,” she added, is for there to be “no place to hide.” It’s that principle that will likely guide Warren as she sets up the new consumer-focused agency. A part of the recently-enacted financial reform law, the Bureau of Consumer Financial Protection will be charged with protecting borrowers from abusive lenders. It consolidates consumer protection authority that had been spread out over about half a dozen agencies; it will have an annual budget approaching half a billion dollars. But to make it “sustainable,” Warren is adopting a different approach than what most had initially expected: she’s embraced industry’s long-held desire for a system of oversight more reliant on basic principles like fairness than one dependent on elaborate and often-convoluted rules. “I should be clear: consumers would be better off” with more rules, she said. “They would be protected from some of the worst possible practices,” Warren, a top adviser to both Obama and Geithner, added. “But, the agency would always be a step behind. It’s only after some number of consumers have been whacked on the head” that the agency would finally take action. “And there’d always be the fighting back and forth” between the agency and the accused lender because the agency would “put a lot of resources into it.” However, it’s not just consumers who’d suffer from the same old approach to regulation. As Warren points out time and again, lenders would suffer, too. “You encourage an industry that wiped out the small competitors because the cost of threading the regulatory thicket would keep going up and [industry] would put a lot of its resources into lawyering,” said Warren, a noted bankruptcy expert who taught at Harvard Law before joining the administration. That would be helpful for lawyers, she points out, “but not very helpful ultimately for consumers or frankly for the industry. “We have a chance to completely reform this entire area,” she said. “If we get it right, there is a smaller regulatory burden on the lenders themselves. I’m looking for sustainability.” The consumer advocate, whose message thus far has received positive reviews from lenders and initial opponents in Congress, said she looks forward to working with industry. But she’s not changing who she is. “Look, I was pretty straightforward when I went in there,” Warren said of her evening with the Roundtable. “I made it very clear: I am who I am, and that’s not going to change. I will do everything I can to build an agency that is strong and independent and acts on behalf of middle class, hardworking families. That is my job, and that is not going to change. “Now, what I also said is, ‘I invite you to think about ways that we can work together and create products for your customers, these same middle-class families, that they can have confidence in and that they can have some confidence in you.’” Like lenders, Warren also has to win others’ confidence. Federal agencies are typically very protective of their turf. With Warren taking a bit from several Washington entities, she’s trying to ensure as smooth a transition as possible. She said she’s spent the first few weeks on the job meeting with the heads of all the agencies whose consumer protection role her agency would assume and calling the chief executives of the nation’s largest banks. Her last meeting before the interview with HuffPost was with Federal Reserve Chairman Ben Bernanke. Warren was mindful of what brought her to temporarily lead the agency she had largely conceived, and for which she arguably was the most effective in getting enacted into law. “I was so deeply touched by what happened,” she said of the outpouring of public support for her candidacy to lead the consumer regulator. “I was overwhelmed. It meant an enormous amount to me, but in a way it felt 100 percent right because this is about building an agency that belongs to the American people. And in many ways, they picked what they wanted.” WATCH the full interview below: ************************* Shahien Nasiripour is the business reporter for the Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.

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Elizabeth Warren: Consumer Bureau ‘The First Real Agency We’ve Built In The 21st Century’ (VIDEO)

October 7, 2010

The Consumer Financial Protection Bureau will be the first real agency of the 21st century, Elizabeth Warren said in an interview with the Huffington Post, and it will rely on interaction with the public in order to accomplish its mission. Warren, who was named by President Obama to set up and run the agency on an interim basis, said that details are still being worked out, but that “crowd sourcing” is to be a fundamental tool of the agency. When organizations crowd-source objectives, thousands or millions of people contribute insights, documents or other information helpful to a common goal. Warren said that she couldn’t elaborate yet on precisely how the operation would be set up “partly because we need to think about the right design, and partly because, I’m told, you need a little technical infrastructure. I don’t think you want me just giving out my cell phone number here and saying, ‘That’ll work.’” The CFPB’s budget will be roughly half a billion dollars, enough to set up a state of the art network. “This is the first real agency we’ve built in the 21st century — well, there’s Homeland Security, but one for the people. And it means we ought to think differently. The government can talk to people and people can talk to the government differently than when the Consumer Product Safety Commission was built, or when the FDA was built. And if we do this right, that should change the whole dynamic of who this agency really is,” said Warren. By gathering information, contracts and documents from homeowners and consumers, and allowing watchdog groups and individual concerned citizens access to those documents, the agency can exponentially expand the manpower it has to review the operations of banks and lenders. The goal would be to become aware of a particularly fraudulent practice before it is rampant and insulates itself in the financial services industry. Warren said that the agency would have to be focused in order to avoid being undermined by its opponents. “This agency has enemies. There are those who would do it harm, for political reasons [and] economic reasons. It is important that I spend every single day and every single thing I can do to strengthen this agency and to give it a clear direction for where it goes,” she said. Warren was interviewed in HuffPost’s Washington office. WATCH:

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Federal Reserve ‘Will Be Gone’ In 25 Years, Top Financial Mind Predicts, Despite Geithner’s Vote Of Confidence

September 30, 2010

A mere half-hour after Treasury Secretary Timothy Geithner praised the “necessary” and “very substantial” actions of the Bush and Obama administrations to “break the back of the financial crisis,” one of the world’s leading financial minds said Thursday that the United States is in the same economic predicament today as it was in 2007, predicting that within 25 years the Federal Reserve “will be gone.” Nassim Nicholas Taleb, renowned derivatives trader, university professor and author of “The Black Swan,” warned a gathering in Washington of the growing risk the nation has taken on as a result of poor decisions by the Fed and policymakers, including trillions of dollars in taxpayer money funneled into bailouts of private industry. “This transformation from private debt … to public debt” is “bad” from a risk standpoint and “immoral” from an ethical standpoint, Taleb — a member of the Derivatives Hall of Fame whose book became a bestseller — told a crowd at the Washington Ideas Forum, an event held by The Atlantic and The Aspen Institute. Deficits “will break the Fed” and it will be replaced, he predicted. “The Romans had a saying,” Taleb added: “The grandchildren should not bear the debt of the grandparents.” That debt is made more dangerous, Taleb said, by the increasingly complexities of the financial system, a problem that he said has not been ameliorated during the last three years. “Debt and complexity are not friends,” he said, because “complexity causes unpredictability,” and heavy debt burdens mean one false move, whether by an individual actor or a system, could spell disaster. Nobel Prize-winning economist Paul Krugman, a popular columnist for The New York Times, “doesn’t understand” the economic situation the U.S. finds itself in, Taleb claimed, nor do most economists. Because of the significant rise in debt, within 25 years “anything fragile will break,” Taleb said. That includes the Fed, he argued, because the Fed “fragilized this country.” “The Fed is what got us here,” he said, because of its inattention to risks in the financial system. “It’s like someone flying a plane without understanding how to fly.” Geithner appeared before the same crowd shortly before Taleb. His assessment of the economy and actions taken in response was essentially the exact opposite. The Treasury Secretary, who as the head of the Federal Reserve Bank of New York played a key role in the immediate response to 2008′s financial meltdown, told the crowd that without the “very substantial” financial force brought to bear “early and quickly” to fight the crisis, “nothing else would be possible.” “It’s worth just stepping back and recognizing that this country did do the necessary thing … in acting earlier to break the back of the financial crisis,” Geithner said in reference to controversial actions such as the Troubled Asset Relief Program and the stimulus bill. Referring to the $800 billion stimulus as “exceptionally large” and TARP as “overwhelming financial force,” Geithner said the two policy decisions are the two most important judgments made by the outgoing Bush administration and incoming Obama administration. Though private-sector economists generally conclude that the stimulus was a success, the unemployment rate has jumped from 8.2 percent to 9.6 percent since it was enacted into law on Feb. 17, 2009, Labor Department figures show. Economists argue that unemployment would have been much higher without the stimulus, though they acknowledge it would likely be lower if the stimulus had been larger. As for TARP, it helped the banking sector recover by instilling confidence in market participants — in part because the world now knew that the U.S. government was prepared to rescue large, systemically-important institutions by virtually any means necessary. The Fed’s multi-trillion dollar commitment to the financial sector and its near-zero interest rate policy likely helped, too. ************************* Shahien Nasiripour is the business reporter for the Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.

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Job-Creation Idea No. 4: Put Those Young People To Work

September 24, 2010

(Part of Huffington Post’s America Needs Jobs series; see the introduction .) There are two age groups that have been particularly devastated by the deep and ongoing unemployment crisis in America: Young people who can’t get their first job, and old people who fear they’ve had their last. The older workers who’ve been laid off present society with a real pickle. It’s very hard for them to find jobs that fit their skills and experience — and they face plenty of age discrimination to boot. There are no easy answers for them — though we’ll explore the problem further in the coming days. By contrast, there is a relatively simple solution for the vastly larger number of young people who can’t find jobs in the first place: Put them to work doing something. Anything. You don’t even have to pay them that much. There are nearly 4 million people ages 16 to 24 who are not in school and are looking for work but can’t find it. That’s an unemployment rate of 18.1 percent. And that doesn’t even count the 1.5 million or so more (another 6 or 7 percent) who have given up the job hunt entirely. “Young people have been getting killed in the labor market,” says Heidi Shierholz, an economist at the Economic Policy Institute. According to the latest monthly job numbers, while 16- to 24-year olds make up only 13.6 percent of the labor force, they account for 25.6 percent of the total unemployed. “The numbers are quite stunning about how much of the brunt of the recession is borne by young workers,” said Harry Holzer, an economist at Georgetown University. And what makes it even worse is that they aren’t able to bounce back once the immediate crisis is over. “Recently, there’s been a lot of evidence about how they get scarred when they try to enter the labor market in the middle of a bad recession,” he said. “They’re going to be badly hurt by this. If they do connect to the market, it’s likely they’ll get a worse job than they otherwise would have gotten. And it may be impossible for them to ever make up for the loss. Their whole profile has been shifted down. “Anything we can do for them that gives them some combination of paid work experience and skill enhancements is really best for them,” Holzer told The Huffington Post. The ideal solution is a program where they get a credential, or some job-training, and to that end Holzer supports government funding to subsidize apprenticeships and on-the-job training. But any kind of public service employment, “even if there isn’t a huge component of skill building” is still better than nothing for young people who don’t have any other options. Late last year, the Center for American Progress issued a report calling for a new commitment to national service , particularly aimed at poverty services — sort of a kill-two-birds-with-one-stone” approach. “[N]ational service is as much about unlocking potential as it is about meeting needs,” the report said. “It is not just a strategy to create short-term jobs, but rather a proven pathway to create long-term employment opportunities for youth who might otherwise remain jobless or employed in dead-end, low-skill jobs.” CAP’s bottom line: “[F]or less than $1.5 billion, Congress could engage close to 150,000 individuals in national service for a one-year term of service at a cost of less than $14,000 per member.” Specifically, the report recommended increased investment in AmeriCorps , VISTA , and youth groups like YouthBuild : YouthBuild is an example of a youth corps model that focuses on secondary education. YouthBuild members rebuild their lives while rebuilding low-income housing. Participants are 16 to 24 years of age and face multiple challenges…. AmeriCorps engages recent college graduates and veterans in public service while also providing substantial funds for youth corps and other program models. All AmeriCorps members receive Segal AmeriCorps Education Awards when they complete their terms of service. These awards can be used to pay back loans or pay for college or graduate school….. VISTA participants — about half of whom have some college experience or a college degree — build the capacity of non-profit agencies while receiving a poverty-level living allowance, health and childcare benefits, and Segal AmeriCorps Education Awards. VISTAs help nonprofits raise funds, develop new programs, build community partnerships, and recruit and manage volunteers. In short, they could greatly increase nonprofit organizations’ capacity to serve low-income people affected by the economic downturn as well as the long-term poor. Former CEO Leo Hindery recently made this proposal in his Huffington Post blog: For the 3 to 5 million unemployed out-of-school youth, a group that burgeons in size every summer when another 6.4 million young people graduate from high school and college, a broad-based Municipal Youth Initiative that draws from our previous successful experiences with VISTA and CETA. Yale economist Robert J. Shiller is calling for a New Deal-style approach that doesn’t just create jobs, but inspires the public: Consider one of the most applauded of Roosevelt’s programs, the Civilian Conservation Corps, from 1933 to 1942. The program was open to young men, initially those 18 to 25, a group that was quite vulnerable economically. The C.C.C. emphasized labor-intensive projects like planting trees. The public appreciated the tree planting because the projects addressed big problems that had been ignored. Major dust storms in and around Oklahoma raged from 1930 to 1936, denuding whole regions of agricultural land. The storms were vivid evidence of an externality that environmentalists had warned about for years, to little avail. Unregulated farming and lumbering had allowed pervasive soil erosion. Aside from the environmental benefits, the C.C.C. encouraged a sense of camaraderie, taught young men new skills and gave its workers a sense of participation in something historic. Congress has recently set plans for tripling the size of AmeriCorps, the modern counterpart of the C.C.C., which now takes both sexes and has no age cap. At its peak, the C.C.C. employed 500,000 young men. Under current plans, AmeriCorps would top out at 250,000 people in 2017, even though the nation now is two and a half times larger. We ought to be bolder. It was the passage of the late Senator Ted Kennedy’s national service bill last April that paved the way for the tripling of Americorps — but that’s actually by 2017. Part of former union leader Andy Stern ‘s overall jobs plan is “Full Employment for Our Children: AmeriCorps and the Kennedy National Service bill ‘On Steroids’.” Till von Wachter , an economics professor at Columbia University, made another important point in his testimony before the Joint Economic Committee in May, namely that young people will need to be flexible — and mobile — to take full advantage of job opportunities as the economy improves. To help with that, he recommends funding career counseling and job training now, “to provide new skills appropriate for a changed labor market situation” in the future. For instance: Subsidies could be given for programs involving on-the-job training, which provide work experience and direct contact with employers; subsidies could be given for enrollment in Community College courses; or vouchers could be provided that allow workers to choose ways to up-grade skills on the private markets. Across the country, the American Dream seems increasingly out of reach. But nowhere is it in greater danger than among today’s unemployed young people, who threaten to become a lost generation. For these young people, especially those at the bottom of the economic ladder, a year-long job in public service could make the difference between a life of employment and a life of unemployment. At $14,000 a pop, doesn’t that sounds pretty cheap? ************************* COMING MONDAY IN THE AMERICA NEEDS JOBS SERIES: Green Is Good (Want to learn more about the series? Read the overview . Got an idea you think we may have overlooked? Email froomkin@huffingtonpost.com . ) ************************* Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail , bookmark his page ; subscribe to RSS feed , follow him on Twitter , friend him on Facebook , and/or become a fan and get e-mail alerts when he writes.

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Elizabeth Warren To Lead Search For New Consumer Chief, Could ‘Pull A Dick Cheney’

September 16, 2010

In addition to being charged with forming the newly-created agency dedicated to protecting consumers from abusive financial products, Elizabeth Warren will lead the administration’s effort to find the first director of the nascent unit, the Huffington Post has learned. President Barack Obama will name Warren, a famed consumer advocate and passionate defender of the middle class, as one of his top advisers on Friday, creating a role inside the White House for the Harvard Law professor and bailout watchdog to lead the effort in forming the Bureau of Consumer Financial Protection. Warren, though, will not be named as his nominee for the Senate-confirmed, five-year post to lead the new entity — at least not yet. She will, however, lead the search to find the right person. Consumer advocates and several dozen members of Congress say she’s it. “Who knows? Maybe she’ll pull a Dick Cheney,” said one source familiar with the matter. Former Vice President Cheney was tapped by then-Gov. George W. Bush to lead his search for a running mate during the 2000 presidential campaign. Cheney settled on himself. The possibility of Obama picking Warren surged in recent days after Obama heaped praise on her last Friday and called her a “dear friend.” However, a day after word leaked Wednesday that Warren would be selected for this different role, news outlets including CBS News, citing the White House, reported that not only was it unlikely Warren would get the nod — she allegedly didn’t want the position in the first place. House Financial Services Chairman Barney Frank (D-Mass.) also said that Warren didn’t want the five-year role . Warren backers hold out hope that she remains on the short list of nominees for the permanent job, but CBS News reports that, “It is highly unlikely that Warren … will eventually be nominated to be director of the bureau.” According to CBS, Warren “is no longer on the list” for the long-term position. The reports could serve to undermine Warren before she even steps into the job. However, if it appears that she’ll ultimately deem herself the most qualified candidate for the permanent position — and her backers in Congress, the White House, and advocacy organizations that have the White House’s ear agree — Obama could very well end up choosing the middle class advocate. Support for Warren reached a fever pitch over the summer, as backers presented her as critical to both the success of the new agency and the financial reform effort as a whole. With a budget approaching $500 million and a staff expected to number in the hundreds, the agency represents the consolidation of a multitude of units inside government charged with protecting borrowers. It’s been touted as the capstone of the Obama administration’s effort to reform the nation’s broken financial system. Getting the right person in the job for the historic agency is key, experts and administration officials say. And Warren has long been touted as the natural choice for the position, given her advocacy on behalf of borrowers, her noted research into consumer debt and financial products, and the fact that she conceived the agency in a 2007 journal article. But Warren is seen as a polarizing figure. Her aggressive advocacy on behalf of working-class families has made her an enemy of lenders who favor less regulation and more opportunities for fee-based income, like excessive overdraft levies and credit card surcharges. Mortgages with exploding interest rates and well-hidden fees were particularly profitable for lenders during the boom, and Warren has fought against such practices. In her new role, Warren will be charged with getting the nascent agency on its feet and setting the tone for years to come. The White House isn’t expected to name a nominee for the directorship for months, sources say. ************************* Shahien Nasiripour is the business reporter for the Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.

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Mike Elk: SEIU Helps Bank Workers Become Whistleblowers

September 16, 2010

Union’s new campaign part of larger effort to unionize banks One of the best kept secrets of the financial reform bill passed in July is tough whistleblower laws to protect bank workers who expose shady lending, credit card and fee practices. But do U.S. bank workers actually know about the new protections? A new Service Employees union campaign aims to make sure they do. SEIU is launching a campaign encouraging bank customers to do two things when at the bank, says SEIU Financial Director Stephen Lerner. “One:

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John Schneider: Will the Middle Class Have Room for Baby Boomers’ Kids?

September 15, 2010

Watching our kindergartners engaged in a game of musical chairs, we nudge them along mentally, past the gaps, hoping they end up in the right place, at the right time. The music stops. Ten kids scramble for nine chairs. Nine land safely; one panic-stricken kid is left standing, squeezed out of the game. When it’s our kid who has no place to sit, our hearts break just a little. And so we baby boomers watch, with trepidation, as our grown children scramble for their spots in the middle class, with its tricky dance steps, its new rules, its ever-dwindling number of chairs. We observe their progress, nudging them forward, helping where we can, hoping they’re in the right place, at the right time. If they’re lucky, they approach the game with all the basic tools – a solid upbringing, an adequate education, a firm work ethic, a pocketful of emotional intelligence, a head screwed on straight. Getting a toehold Maybe they are fortified with degrees from good schools. Maybe they are ambitious, or charming, or lucky. Maybe they know somebody who knows somebody with an employment opportunity. Maybe they are blessed with perfect timing. Or maybe they are just more resumes in tall stacks on the unoccupied desks of people who were downsized — more college graduates with big student loans and big dreams on hold, struggling to get a toehold in the world. They piece together part-time jobs that may, or may not, turn into something bigger. They work outside their fields. They roll with the punches — downsizing, pay freezes, unpaid furlough days. If they are fortunate, they accept bare-bones health insurance grudgingly bestowed up them by tight-fisted employers; if they are not so fortunate, they pay for their own insurance, or go without it. They scrape. They stay alive. A different script We’ve been inclined, for some time now, to wonder if our children will ever duplicate our standard of living — a standard built on steady, if unspectacular compensation, good health, rising real estate values, and the prudent use of readily available credit. We rose above our parents, economically, following the script of the American Dream. Is that still a viable model? Will the next generation rise above the previous one? Mounting evidence says it won’t. Everywhere you look these days Arianna Huffington is talking about her book, Third World America , in which the Huffington Post creator lays out a convincing case for the disappearance of the middle class in this country. Huffington is hardly the first person to notice the growing gulf between rich and poor, and the erosion of the middle. Consider just one piece of the crumbling puzzle: A record 2.8 million U.S. households got foreclosure notices in 2009, and the wreckage could be even worse this year. Will our children own their own homes? Will they find jobs, and keep them? Will they be able to give their children the advantages they, themselves, enjoyed? Will they figure it out? Will they find a chair when the music stops? Email John Schneider at jschneid@lsj.com. This post originally appeared on September 12, 2010 in the Lansing State Journal .

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John Schneider: Will the Middle Class Have Room for Baby Boomers’ Kids?

September 15, 2010

Watching our kindergartners engaged in a game of musical chairs, we nudge them along mentally, past the gaps, hoping they end up in the right place, at the right time. The music stops. Ten kids scramble for nine chairs. Nine land safely; one panic-stricken kid is left standing, squeezed out of the game. When it’s our kid who has no place to sit, our hearts break just a little. And so we baby boomers watch, with trepidation, as our grown children scramble for their spots in the middle class, with its tricky dance steps, its new rules, its ever-dwindling number of chairs. We observe their progress, nudging them forward, helping where we can, hoping they’re in the right place, at the right time. If they’re lucky, they approach the game with all the basic tools – a solid upbringing, an adequate education, a firm work ethic, a pocketful of emotional intelligence, a head screwed on straight. Getting a toehold Maybe they are fortified with degrees from good schools. Maybe they are ambitious, or charming, or lucky. Maybe they know somebody who knows somebody with an employment opportunity. Maybe they are blessed with perfect timing. Or maybe they are just more resumes in tall stacks on the unoccupied desks of people who were downsized — more college graduates with big student loans and big dreams on hold, struggling to get a toehold in the world. They piece together part-time jobs that may, or may not, turn into something bigger. They work outside their fields. They roll with the punches — downsizing, pay freezes, unpaid furlough days. If they are fortunate, they accept bare-bones health insurance grudgingly bestowed up them by tight-fisted employers; if they are not so fortunate, they pay for their own insurance, or go without it. They scrape. They stay alive. A different script We’ve been inclined, for some time now, to wonder if our children will ever duplicate our standard of living — a standard built on steady, if unspectacular compensation, good health, rising real estate values, and the prudent use of readily available credit. We rose above our parents, economically, following the script of the American Dream. Is that still a viable model? Will the next generation rise above the previous one? Mounting evidence says it won’t. Everywhere you look these days Arianna Huffington is talking about her book, Third World America , in which the Huffington Post creator lays out a convincing case for the disappearance of the middle class in this country. Huffington is hardly the first person to notice the growing gulf between rich and poor, and the erosion of the middle. Consider just one piece of the crumbling puzzle: A record 2.8 million U.S. households got foreclosure notices in 2009, and the wreckage could be even worse this year. Will our children own their own homes? Will they find jobs, and keep them? Will they be able to give their children the advantages they, themselves, enjoyed? Will they figure it out? Will they find a chair when the music stops? Email John Schneider at jschneid@lsj.com. This post originally appeared on September 12, 2010 in the Lansing State Journal .

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Obama Strongly Hints At Warren Nomination To Head Consumer Bureau

September 10, 2010

President Obama hailed his long friendship with Harvard Professor Elizabeth Warren on Friday, crediting her at his new conference with the idea for what has since become the Consumer Financial Protection Bureau, when asked whether she was still the leading candidate to run it. After calling her a “dear friend” and adding that he’s known her since he was in law school, he strongly hinted that she would be the eventual nominee by qualifying that he was “not going to make an official announcement until it’s ready.” Obama’s clear emphasis on “official” left little room for doubt that the matter is all but decided. Speculation has swirled that Obama would name Warren to head the agency during the summer recess to avoid a confirmation battle. His opportunity to do so expires early next week, when Congress returns. But he could also recess appoint Warren in October, after Congress recesses to campaign for reelection. “The idea for this agency was Elizabeth Warren’s. She’s a dear friend of mine. She’s somebody I’ve known since I was in law school. And I have been in conversations with her. She is a tremendous advocate for this idea,” he said. “I’ll have an announcement soon about how we’re going to move forward. I have had conversations with Elizabeth over these last couple of months. But I’m not going to make an official announcement until it’s ready.” Obama’s confidence in Warren comes as the Wall Street Journal continues its assault on her, questioning whether she could handle the job in an editorial Friday. “We hate to pick on Harvard law professor Elizabeth Warren, the front-runner for the consumer post, because the other candidates floated so far may know even less about banking than she does. The White House should step back and review a new list of prospects with an eye toward a healthy banking market, not merely a positive reaction from the Huffington Post,” offered the Journal. The GOP’s campaign against Warren has been going on since 2009, when House Republicans attempted to amend the financial reform bill to include language preventing Warren from becoming the CFPB’s chief. Warren met on Tuesday with Obama. Asked by Bloomberg News if he was concerned that Warren would have trouble being confirmed by the Senate, Obama said that even an appointment for dogcatcher would have trouble getting through the divided Senate under such partisan conditions. “I’m concerned about all Senate confirmations these days. I mean, if I nominate somebody for dogcatcher,” he said. “I wasn’t trying to be funny. I am concerned about all Senate nominations these days. I’ve got people who’ve been waiting for six months to get confirmed who nobody has an official objection to and who were voted out of committee unanimously, and I can’t get a vote on them.”

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Simon Johnson: Republican Nightmare: Putting Elizabeth Warren to Work Now

September 9, 2010

President Obama is finally looking for bold, creative and clever ways to change the way the US economy operates — preferably with measures that will take effect by the November midterms and change the tone of the broader political debate. His tax proposals this week have some symbolic value, but in the broader sense all of these fiscal suggestions are tinkering at the margins. What could he possibly do that would grab people’s attention, mobilize his political base and put his opponents on the defensive? There is an easy answer: Appoint Elizabeth Warren to start running the Consumer Financial Protection Bureau (CFPB) immediately. And the brilliant part of this idea — as explained by Shahien Nasiripour at the Huffington Post (see also David Dayen’s Thursday coverage ) — is that the Dodd-Frank financial reform legislation allows the person charged with setting up this new agency to be an outright appointment, rather than a nomination subject to Senate confirmation. Warren’s credentials are impeccable — she came up with the original idea for the CFPB, she pushed effectively for it to become legislation and she has proved most effective in her oversight role as chair of the Congressional Oversight Panel (COP) for the Troubled Asset Relief Program. And her manifesto for the CFPB is sensible and actually pro-business — although she naturally opposes the specific ways in which big banks mistreat people . No doubt Republicans in the Senate would try to derail her nomination to head the CFPB as they have done with numerous other nominations over the past year and a half. Their motivation would not be her views or expertise — she has earned serious Republican respect as a result of her COP role — but just part of their electoral strategy to block the president’s agenda and to undermine an agency they have consistently opposed. The Treasury Secretary is explicitly authorized by an Act of Congress to pick an interim head for the new agency — with a view to getting it up and running immediately (in fact, what has he been waiting for?). Presumably the Senate (and the House) passed this specific measure expressly to expedite the CFPB’s work. Professor Warren has strong political support and would get the new agency off to a great start. She would represent the Obama administration’s serious attempt to rein in financial misbehavior, at the same time as keeping the economic recovery on track. Anyone who thinks she would be bad for American families has not been paying close attention. And best of all, she is very good at explaining what she is doing and why that makes sense. The president needs clearer messages and stronger substance — and he needs them fast. He should move at once to appoint Elizabeth Warren.

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Merton and Joan Bernstein: Our Response to Alan Simpson

September 2, 2010

Former Senator Simpson, co-chair of President Obama’s Fiscal Responsibility Commission, calls our Huffington Post blog opposing Social Security benefit cuts and raising retirement age “a remarkable spew of drivel” and “an “extraordinary screed.” His letter with that attack (below) invited our comments. Here they are. All that we hear from commission members is the supposed need to trim Social Security benefits and to raise retirement age, which also cuts benefits. That is strange because Social Security does not contribute to deficit growth. Cuts are not necessary because the Social Security trust fund, now at $2.6 trillion and projected to grow to over $4 trillion, makes the funding outlook quite solid for another quarter century. Then, if necessary, a very modest FICA rate increase, about 1% for employees and a matching amount by employers, would banish the small Social Security long-term shortfall. Meanwhile, improved earnings — which are projected — would make such a change completely affordable. Why don’t we hear about that from commission members? The secrecy of Commission meetings denies the public and experts any opportunity to address areas of concern. Here we do not know what the Commission asked Steve Goss which might explain why he emphasized the aged dependency ratio in the material you sent us. While demographic dynamics are important to Social Security funding, so are other factors, like the level of employment. And, as our post shows, improved productivity has offset some dramatic shrinkage in the working population. For example, in 1900, almost 40% of the work force farmed; today, fewer than 2% do. By the alarmist logic of the aged dependency ratio, the United States would be starving. Of course, we are not because the technology of food production has changed so spectacularly. This argues for greater attention to encouraging technological innovation and education and training to use it. And, of course, few advances match the enhancement of productivity achieved by computerization. As late as the 1990s, that effect was pooh-poohed by many. Further, Social Security benefits are quickly transformed into purchases of goods and services. Reducing them would reduce business income by hundreds of billions of dollars. Social Security is performing just as it was designed to: expand benefit payout when the economy weakens and building on the biblical principle of laying up reserves during years of plenty to meet needs in leaner years. Our article presented analyses shared by nationally respected economists. More importantly, a majority of the American people support our conclusions. Here is the letter we received: Simpson Letter

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Bank Profits Soar, Lending Falls As Banks Pay Next To Nothing For Funds

August 31, 2010

Bank profits jumped 21 percent last quarter to nearly $22 billion, the highest level in three years, as banks put away less money to cover future losses, fewer borrowers fell behind on payments and lenders paid the least for their funds in perhaps 50 years, a government report released Tuesday shows. Lending also dropped by about $96 billion, or 1.3 percent, as borrowers continue to remain skittish about the “slow recovery,” Federal Deposit Insurance Corporation Chairman Sheila Bair told reporters Tuesday in Washington. “Consumers and businesses need to have confidence in the recovery before they will start making decisions on credit,” Bair said, according to a transcript of her remarks. Meanwhile, despite the sector’s high profits, challenges remain: home prices are forecast to decline into next year while lenders continue to repossess homes at record rates; the commercial real estate market has yet to hit its nadir; community banks continue to fail; and the number of lenders on the FDIC’s confidential “Problem List” continues to grow. Nearly 830 banks are on the list, up from 775 at the end of March, the FDIC’s quarterly report shows. “Without question, the industry still faces challenges,” Bair said in a statement. “Earnings remain low by historical standards, and the numbers of unprofitable institutions, problem banks and failures remain high. But the banking sector is gaining strength… most asset quality indicators are moving in the right direction.” It also helps that banks’ cost of funds — the money they pay to garner deposits and other funds that are then used to lend, invest or trade — dropped to the lowest rate in 26 years of FDIC quarterly records. Banks paid 0.97 percent in interest for their funds, the first time they’ve paid less than one percent during a quarter since at least 1984, FDIC documents show. Historical records on commercial banks’ cost of funds going back to the inception of the agency in 1934 show that the last time banks paid less than one percent for the year was 1960. With the main interest rate effectively at 0.19 percent, savers suffer in a low interest-rate environment as banks pay less to attract deposits. The Federal Reserve’s policy-making body, the Federal Open Market Committee, has kept the rate at which banks lend to each other for overnight funds between 0 and 0.25 percent since December 2008. Elsewhere in the FDIC report, the agency noted that two of every three banks reported higher profits compared to last year as firms put away the least amount of money to cover losses since the January-March period of 2008. Money socked away for a rainy day would otherwise be recorded as profit. Though nearly two of every three banks increased their reserves for potential future losses, large banks cut theirs. Banks put away $40 billion, 40 percent less than during the same period last year, to cover future losses. Those with more than $10 billion in assets recorded $19.9 billion of the industry’s $21.6 billion of profit, or more than 92 percent. Also, lenders wrote off $49 billion in uncollectible loans, a small decline from a year earlier and the first year-over-year decline since 2006. Loan losses are stabilizing, the agency said. Commercial real estate loan charge-offs, though, saw an increase. Loans delinquent for at least 90 days but not yet written off also declined for the first time in four years, though they increased for banks with less than $1 billion in assets, the agency said. Loan balances continued their decline, led by real estate construction and development lending which dropped more than eight percent from last quarter, according to the FDIC. Loans to small businesses and farms dropped almost two percent, or more than $13 billion. Loans to large businesses, meanwhile, dropped just 0.4 percent. Bair noted that community banks “slightly” increased their lending — “to their credit,” she added. ************************* Shahien Nasiripour is the business reporter for the Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.

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Fawn Germer: "Success Is Always Temporary, Failure Lasts Much Much Longer"

August 24, 2010

Last week, I returned from a speaking tour of Asia where American bravado met Chinese humility. I am a leadership and motivation speaker who tells people to expect success, make decisions with confidence and to advertise their strengths and wins. That is the exact opposite of the Chinese way, which is to be humble and sense that failure looms. I just got an e-mail from my new friend, Elmer Cheng, who is senior manager of product development for Polygroup — the company that manufactures most of the artificial Christmas trees and backyard swimming pools in the U.S. He is the 24-year-old son of Paul Cheng, the patriarch and founder of the company. When I was in Hong Kong, I interviewed the family for a book I am writing about leadership, globalization and the Chinese way. I woke up to an e-mail today where Elmer gave me something significant to ponder. “We do not know how to handle praise very well,” he wrote of the Chinese people. “We are always unsure how to respond and it is almost borderline embarrassing. Of course, praise is always welcome but in practical terms, some Chinese may see it as useless, because receiving it does not teach you how to improve or maintain success. Receiving criticism on the other hand, gives you a path of what needs to be done. What drives us is the fear of failure and not a moment of praise. Success is always temporary, failure lasts much much longer.” That is the exact opposite of what American business leaders are coached to do. While it seems a little dark, this Chinese concept interests me because, for them, it seems like it is an equally effective model for success. They obviously are doing something that works. Last year, Polygroup was recognized as Walmart’s supplier of the year for the fifth time. I don’t imagine I’d get much business as a motivational speaker speaker on leadership if I stood in front of major corporations telling people to hunker down and fear failure. While some of the American business leaders I know don’t brag on themselves, few will underrate or abbreviate what they have done. When I interviewed many business people in China and Taiwan, almost all minimized their achievements. When I would ask them to summarize their successes, I got a lot of silence and stares — not because they didn’t know, not because their achievements were classified information, but because that simple, ice-breaking question caused real discomfort for them. I’d been told that the Chinese people were humble, but I never expected that humility to be so pronounced. Would they be more successful if they stopped fearing failure and started pounding on their chests saying, “I’m successful! I’m wonderful! And, doggone it, people like me!” I don’t know. The Law of Attraction, which says our thoughts create our reality, has spawned a self-help industry in the U.S. where people have tapped into the their inner guru to remind themselves that anything is possible if they expect success. Elmer Cheng showed me that much is possible by respecting failure and shutting up about the victories. I told him I am going to post an article about his thoughts on the Huffington Post, one of America’s top ten websites. His response? “You can use my quote but can I remain anonymous?” I told him it is important for me to use his name so readers will know I didn’t make anything up. Reluctantly, he agreed. Humble.

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Bush Tax Cuts: Less Than One-Third Support Extending Reduced Rates (POLL)

August 20, 2010

Fewer than one in three Americans favor extending tax cuts enacted into law by former President George W. Bush when they expire at the end of this year, according to a CNN/Opinion Research poll released Friday. The survey finds that 31 percent say they support allowing the cuts to continue for all taxpayers, regardless of income level. By contrast, the poll finds 51 percent believe the reduced rates should be kept in place for families earning less than $250,000 each year, but not for households bringing in more than that cash amount. Whether or not the tax cuts approved by Bush should be extended for the wealthy has emerged as a hot topic for debate among lawmakers and candidates running for office in the midterm election cycle. The Obama administration, as well as many Democrats, have signaled an intent to leave the decreased rates in place, with the exception of for taxpayers earning an annual income that exceeds $250,000. “There are many good reasons not to extend the high-end parts of the Bush tax cuts having to do with the fear that a temporary extension could be made permanent,” explained chief economist to Vice President Joe Biden, Jared Bernstein, to the Huffington Post earlier this week. “What you are talking about — a $30 to 40 billion range in terms of adding to the deficit by extending the high end — could easily become $700 billion over a ten-year budget window.” Meanwhile, Republicans on a large scale have argued for an extension of the tax cuts based on the justification that the lower rates would better enable economic growth and job creation. The nonpartisan Congressional Budget Office forecasted on Thursday that allowing the reduced rates to remain in place could give the economy a sizable jolt in the short term; however, by extending the measure in full for all Americans, the federal deficit could increase to the point that the debt accounts for 8% of GDP by 2020.

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Don McNay: Is Main Street ready for the second wave of the recession?

August 13, 2010

Kentucky Rain keeps pouring down. And up aheads another town that I’ll go walking through. With the rain in my shoes. -Elvis Presley I’ve been driving through small towns in Kentucky and I keep seeing the same thing. Businesses that have suddenly closed or holding “going out of business” sales. I’m not a big fan of Ben Bernanke or Alan Greenspan. As John Paulson proved, you can make billions of dollars betting against the advice that Ben and Alan have been dishing out over the last decade. Ben and Alan are making noises about a “double dip recession.” Most who watch the economy closely says the same thing. To people on Main Street, it’s has not been a dip. We took a drop to the bottom two years ago and stayed there. Although Wall Street has done well and paid themselves multi- million dollar bonuses, Main Street has had a hard time. I blame the bailouts. The country would have been better off letting the “too big to fail” banks fail and rebuild the economy from ground zero. Instead we are bouncing along in a “lost decade” like Japan had in the 1990′s. We had a choice between having a financial heart attack and quick recovery or financial cancer. Washington (and its lobbyists) chose cancer. I look at the boarded-up stores, high unemployment, higher underemployment, the lack of economic activity and inability for small businesses to borrow even in a low interest rate environment. The problems of Main Street are not going away soon. For those of us who are looking to create wealth without Wall Street, I come back to three points. First and foremost, Move Your Money. You can learn how to do it at http://moveyourmoney.info Arianna Huffington and others at Huffington Post created a movement that is growing by leaps and bounds. People are moving their money out of Wall Street banks into community banks and credit unions. They are encouraging the charities they support and the government entities who get their tax dollars to do the same thing. People who move their money are making a statement. They are mad as hell and not going to let Wall Street control their lives. Community banks and credit unions are more likely to be spreading the money around on Main Street. They don’t have million dollar bonuses to shell out. Community banks and credit unions might keep some Main Street businesses from falling over the edge. The second thing every individual can do is keep on getting rid of debt. Cut up your credit cards. Pay off the car loans and if you have good credit (and a job); look for every opportunity to refinance while interest rates are low. The third factor is for people to start creating their own jobs and not depending on big business. Entrepreneurship is not a new idea. According to Tom Peters, in 1900, 50% of Americans were self-employed. By 1977, that number had dropped to 7% as big corporations ruled. Now big businesses are cutting back, outsourcing to other countries and slashing wages and pensions. The idea of lifetime employment doesn’t exist in the private sector. I’ve seen cases where employees put in a lifetime of service, expecting a good retirement, only to find that the pension they planned on is not available or greatly reduced. Those of us on Main Street need to protect ourselves. Moving our money, cutting up our credit cards, and owning our own businesses are the way to do it. Don McNay, CLU, ChFC, MSFS, CSSC of Richmond Kentucky is an award-winning financial columnist and Huffington Post Contributor. You can read more about Don at www.donmcnay.com McNay founded McNay Settlement Group, a structured settlement and consulting firm, in 1983, and Kentucky Guardianship Administrators LLC in 2000. You can read more about both at www.mcnay.com McNay has Master’s Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University. McNay has written two books. Most recent is Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field. RIP Elvis Presley.

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Don McNay: Bank of America and the Whopper.

August 8, 2010

Hold the pickles, hold the lettuce, special orders won’t upset us -Burger King jingle A Bank of America call center “tantalized” their employees. They offered Burger King Whopper’s to workers as a reward for hitting a quota, while peddling Bank of America products. The people were employed in a “customer service” call in center. They were supposed to be helping people with problems, not giving a sales pitch. Somehow this incident sums up everything that is currently wrong in America. Bank of America is a “too big to fail” Wall Street bank that received bailout money from the American taxpayers. They hit the jackpot twice as they got more bailout money when they purchased Merrill Lynch. Now, it’s using bailout money to “encourage” their employees to sell products to people who were looking for assistance. People who work their way through a Wall Street bank’s “customer service” maze aren’t looking for a sales pitch, they are looking for help. Note that Bank of America didn’t offer incentives for employee helping customers solve their problems. They only offered the Whoppers to people pushing products. If you want food, make a sale. Actually the entire sales team had to make their quota in order to get food. According to the Huffington Post, “a flier provided by a former employee of the call center, which only takes incoming calls, says that if ‘each person on your team gets 2 Sales, everyone on the team will get to choose 1 item from the Dollar menu at Burger King and receive next day.’ ” If one of the team didn’t think that cramming products was part of their job description, they knocked all their fellow employees out of Whopper world. Talk about peer pressure. How would you like to the one “customer service” representative who was kept the rest of the crew from their free Whopper. I’ m sure the “customer service” representatives were pitching like the characters in Glengarry Glen Ross. Not just any kind of incentive but the worst kind of junk food. I’ve had a few Whoppers in my time. Probably a few thousand. They taste great but are not good for you. Which helps explain why I am one of the 70 million Americans who are obese. According to the Burger King web site, a Whopper has 670 calories, 51g of carbs, and 40g of fat and 1020mg of sodium. I like mine with cheese so throw another 100 calories on for that. I’m not a nutrition expert but really doesn’t sound healthy. I swore off the Whoppers, and every other fast food, over a year ago but I occasionally fall off the wagon. Fast food temptation is everywhere and I don’t even work at Bank of America. In a lower wage (probably minimum wage) type of job, you aren’t going to turn down free food, no matter how unhealthy it is. Which leads to the next problem. I’m a huge fan of Michael Pollan and one of the things that he notes in his writing is how expensive it is to eat healthy. I keep buying organic eggs at $4 a dozen but it is really tempting to get the non organic at half the price. If I am a lower income family struggling to survive, I am never going to pick the organic items. Thus the richer not only get richer, they get to live more healthy and productive lives. I was opposed to the Wall Street bailouts but given a choice between giving the money to wall street or spending the money on vouchers for people to purchase healthy food, I would vote for the vouchers. Whoppers would not be on the list. I’ve been avidly pushing the concept of Move Your Money. http://moveyourmoney.info/ When I see a “too big to fail” bank handing out Whoppers for pushing products, it tells me that the bank does not hold the same values or belief systems that I do. I’ve moved my money elsewhere. And encourage everyone to do the same. It could be that the Whoppers are part of a master plan by Bank of America. You might remember that Wal Mart got in trouble a few years ago for purchasing life insurance on employees and profiting when they are dead. I have not seen any evidence that Bank of America is buying insurance on its employees and plying them with Whoppers. I guess it is possible. It would be cruel and heartless but a lot of stuff that happens on Wall Street is cruel and heartless. On the other hand, it might allow Bank of America to pay back some of the bailout money that it owes the America taxpayers. I’m not going to be banking at Bank of America. I’ll do my best to stay away from the Whoppers too. Don McNay, CLU, ChFC, MSFS, CSSC is an award-winning financial columnist and Huffington Post Contributor. You can read more about Don at www.donmcnay.com McNay founded McNay Settlement Group, a structured settlement and financial consulting firm, in 1983, and Kentucky Guardianship Administrators LLC in 2000. You can read more about both at www.mcnay.com McNay has Master’s Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University. McNay has written two books. Most recent is Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field

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Al Franken Endorses Elizabeth Warren For Consumer Protection Bureau

July 24, 2010

Sen. Al Franken (D-Minn.) joined the effort to persuade President Obama to appoint Elizabeth Warren to head the Consumer Financial Bureau in an interview with the Huffington Post on Saturday. Earlier that day, Sen. Jeff Merkley (D-Oregon) said he was endorsing Warren for the position and has made his position known to the White House, as has Sen. Bernie Sanders (I-Vt.). More than 60 House members have called on the president to nominate Warren and more than 160,000 people have signed an online petition. “I really like Elizabeth Warren,” said Franken, adding that he often had her on as a guest on his talk-radio show. “Her work on bankruptcy is what put her on our radar at the show in 2005.” Sen. Chris Dodd (D-Conn.) has questioned whether she’d be able to get 60 votes to overcome a filibuster, though the statute would allow the president to appoint her on an indefinite basis until a nominee is confirmed. Franken said he wasn’t sure whether the White House wanted the fight. “The White House has to decide if they want a confirmation fight. I don’t know what their considerations are. In my consideration, I think Elizabeth would be the best,” he said.

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